- Brian Morrissey

NEW YORK Early this month, a familiar ad industry scene took place: Media buyers and advertisers sipped cocktails and nibbled on hors d'oeuvres at Le Parker Meridien after getting a preview of upcoming programming at a theater in Midtown Manhattan.

But this dog-and-pony show wasn't hosted by a cable or broadcast network looking to woo buyers with its fall lineup of new shows. Rather, it was Microsoft, which wants ad buyers to think of its digital properties as a network alternative as they head into the traditional upfront buying season.

Despite the surface similarities, the Microsoft "Digital Showcase 2008" presentation points to the vastly different marketplaces that exist in digital media compared to broadcast. Unlike TV upfronts, Microsoft's preview was not followed by a series of white-knuckle negotiations in hotels. In fact, Microsoft has yet to strike any deals for the programming it previewed.

But digital has a place in the TV upfronts. Cable and broadcast networks will roll out digital offerings to complement their slate of TV shows. At The Weather Channel, upfront sales now account for 20 percent of digital revenue, according to Paul Iaffaldano, evp of media solutions. The cable network has pitched its TV and Web programming simultaneously for the past 4 years. It looks to sell a feature like its "Weather Ready" series of driving tips for hazardous conditions as a package.

"If you buy that on air but not the sponsorship online, you're missing a big opportunity," he said.

But cable and broadcast networks remain a small part of the online advertising industry, which is still dominated by Internet specialists like Google, Yahoo! and Microsoft. The unique characteristics of the Web, such as the ability to quickly change tactics and messages, relegate upfront-style buys to niches, according to buyers. AOL has decided to skip its upfront gathering this year after holding one last year. Similarly, Yahoo! won't repeat the "InFront" gathering that it held last year to coincide with the network upfronts. A rep said it would instead hold a series of smaller meetings with advertisers and agencies to present opportunities.

The lack of enthusiasm among portals for copycat upfront presentations reflects the shifting dynamic of the Web, which has spawned new properties that have decreased the power of portals as a one-stop shop for consumers and advertisers.

"There's a lot of available inventory," said Michael Hayes, svp and managing director of North America for Interpublic Group's Initiative Interactive. "In most cases, there's not a compelling reason to secure something that far in advance."

The digital upfronts have several unique characteristics. Unlike TV, the vast ad inventory of the Web puts the power firmly in the hands of the buyer. The broadcast upfronts are premised on scarcity that does not exist, for the most part, online. Rather than a set release schedule for programming, many Web properties, like young male-focused entertainment network Heavy.com, employ what its chief marketing officer Eric Hadley calls a "rolling upfront," in which it has a regular group of 10 to 15 program ideas it discusses with advertisers throughout the year.

Within the video space, only a few players outside of cable and network properties are attempting to hold upfronts. Broadband Enterprises, for instance, will this week hold its second upfront presentation. Young-male video programmer Ripe Digital Entertainment also held an upfront presentation.

But adopting the TV upfront model, which even NBC Universal chief Jeff Zucker has hinted needs an overhaul, makes little sense, according to Randy Kilgore, chief revenue officer at Tremor Media, a video ad network.

"Here's a model that's supposed to be broken," he said. "It's dying a slow death in front of our eyes. To try to replicate that online is silly. There's so many interesting ways to buy, target and reach users through online video, it seems anachronistic."

Meridee Alter, svp and media director at independent agency RPA, said the dynamic nature of the online medium argues against buying in advance. New sites emerge so quickly, advertisers would have their hands tied, she said. Last year, for instance, Glam was barely on the agency's radar. By the end of the year, it had emerged as a must-buy for reaching fashion-focused women.

"It's about how quickly things change online," she said. "New sites pop up out of nowhere that are big things."

Yet that doesn't mean the TV ad-buying model doesn't have a place online. The Web is not entirely without the inventory scarcity and strong advertiser demand that creates ideal conditions for upfront negotiations.

Several top advertisers, for instance, hold upfront negotiations to lock up prime inventory months in advance. Automakers, for instance, hold upfront negotiations with third-party auto sites like KBB.com, Cars.com and the car-comparison sections of portals in the fall.

Similar ad-hoc upfront deals take place in categories like entertainment and retail. As in the auto sector, the buyers are firmly in control. Top movie studios buy key ad slots in the fall for the year ahead. For retailers, the budget cycle means they look ahead to the holiday season around February.

"You have to be there, it's become a must-have" Hayes said of category upfronts. "There's not a lot of things in the online space that are a must-have."