Ahead of NewFronts, Industry Leaders Predict Brand Safety Will Be Top of Mind

As the 2019 NewFronts kicks off in New York today, the brand safety issue will once again be the apex talking point between programmers and brand and agency partners, who are considering whether to shift more of their advertising budgets into OTT and non-linear television. The annual Adweek NewFronts roundtable convened at Adweek’s HQ a few weeks ahead of the marketplace also revealed that following consumer patterns and listening to their view wants and needs will be central, as will the debate over free and subscription viewing models. Weighing in on what's ahead were Alana Calderone Polcsa, svp, Warner Brothers Entertainment, the Ellen Show and the Ellen Digital Network; John Halley, COO, ad sales, Viacom; Anna Bager, evp, industry initiatives, IAB; Sarah Personette, global vp, Twitter client solutions; Peter Naylor, svp, ad sales, Hulu; and Tara Walpert Levy, vp, agency and brand solutions, Google and YouTube. One interesting trend that surfaced during the discussion: the courtship of DTC and challenger brands in the OTT space, with programmers seeing them as almost kindred spirits and particularly ripe for their nontraditional platforms. —James Cooper Adweek: What are some of the major trends and themes driving the streaming and OTT economy as we head into the NewFronts this year? Tara, we’ll start with you and work around the table. [kickout id="4" label="cover"] Tara Walpert Levy: Well, I think candidly there’s a fundamental change in what and how people are watching. It’s less through traditional television and more through alternative devices, whether that’s connected TV or mobile. And I think the primary reason for that is also they’re watching a widely different range of content that’s driven by their personal passions. The whole idea, I think, of prime-time television has become personal, which is the headline, really, as we head into the NewFronts. Peter Naylor: The first big trend we see is consumers want and expect everything to be personal in media. And then the other big consumer trend is the rise of on-demand everything. And so, when you combine that with the rise of personalization, that means television and video is increasingly on demand and personalized, and that’s what OTT is all about. It’s the right everything, the right time, the right place, the right context, the right show because they chose it, it’s personal and that’s what’s fueling this because it’s just a better way. John Halley: A theme we talk about is what’s old is new again. What I mean by that is that video product, digital video offerings that eight years ago consisted of full-episode consumption on a desktop computer and then morphed to mobile and app is now increasingly happening via TV screens. If you talk to any big long-form player, 80% plus of that video duration is happening in the living room on a TV screen, often with other people in the room. So OTT is not an 18-year-old on the subway watching Netflix on his phone; it’s much more what we think of as television. And it’s TV in its ability to drive brand awareness. Alana Calderone Polcsa: From a publisher standpoint, business diversification is going to be a trend. So publishers increasingly want to own their own destiny and yet want to be where audiences are en masse, which, frankly, they don’t fully monetize and they don’t own, so as a result you’re going to start to see a mix from an advertiser perspective in terms of offering. So while the NewFronts is really rooted in video content, you’ll start to see offerings like experiential events, podcasts and other products that really offer the advertisers more and let audiences experience their brand in different ways. Tara and Sarah, where are you in the journey to improving brand safety? Walpert Levy: I think we’re probably at this the longest, and we’ve taken a lot of bold steps over the last 24 months, which I think at the highest level are really around tightening a policy based on what we learned, not only from our partners and our clients but also NGOs and other experts leaning into not only the machine learning, but the humans who are looking at the content as well. What I think matters to our clients is multiple third parties have repeatedly said we’re delivering 99% plus brand safety in every environment on YouTube, and they seem very happy with that feedback. Per Comscore, the market sees YouTube as the No. 1 OTT ad-supported platform in terms of reach and viewing hours. And we offer a lot of signals that associate more with what is not just a brand safety issue, but is a traditional marketer desire, which is content that’s more likely to be seen on the living room screen, that’s more likely to have a higher production value and that has additional levels of brand suitability protection around it. [kickout id="1"] Sarah Personette: We want to make sure that people can find credible content and that they can engage safely in conversing and connecting with that content. So from a brand safety perspective, that is also what we want to offer our advertisers through—very similar to what Tara talked about—human review. We do it through machine learning, understanding the right signals to be able to pull content down. And then also making sure that there’s placement control for advertisers so that they can be in the right environment. All of the in-stream video sponsorships and in-stream video ads enable our clients to put their content in front of high-quality premium [audiences] at scale that is brand safe full stop. How has the rapid rise of OTT impacted viewing, and how are marketing and advertising forms associated with it evolving? Naylor: We’ve got over 50 million ad-supported viewers, and about a third of them self-describe as cord-cutter or cord-never. So you must make OTT part of your media mix, and in fact it’s an important part because you’re getting what everybody covets, which is unique reach. And when it comes to the form factor, marketers are finally realizing that while we’re happy to take their :15s and :30s, there’s so much more that is possible with interactive ads. And obviously, when you have a healthy peppering of data on top of this stuff, the one-to-one nature of the environment really soars. Halley: The composition of the audience is different in the OTT environment. So in the case of Pluto [Viacom’s new AVOD platform], half of it is 18 to 34 and half of it is people who don’t watch pay TV, so these are incremental audiences. If you think about an advertiser and the reach challenges that they have, OTT is a very powerful offering. As to form and factor, I think what’s interesting is that so much of it is being watched in the living room, and so much of it is really not happening on a mobile phone in a clickable environment. And as we move from linear into addressable environments, the economic tailwind of targeting brings more value for the viewer, and more value for advertisers. We don’t need to sell $500,000 budgets; we can sell much smaller budgets. The entry point is a lot lower, and I think it fundamentally changes the economics. [kickout id="3"] Alana, what has bubbled up that has become something major impacting how you’ll approach the NewFronts in 2019? Calderone Polcsa: So brand safety and being in a safe environment is, I think, really table stakes at this point. And advertisers and clients are telling us that the evolution is going to be toward a trusted environment. For a consumer, trust is essential—it drives purchase decision and loyalty and brand advocacy. If you’re an advertiser, it’s less about, or it becomes not just about, being in front of an audience in a safe environment but actually in an environment that if there’s a trusted personality or there are attributes around trust, that can halo back to the brand. What are some of the major imperatives for the IAB regarding video as you head into the NewFronts? Anna Bager: We’re very excited, obviously, about OTT and what’s happening in video and how fast this market has moved, but there’s still a lot that we feel needs to be explained and solved for in the market, specifically around OTT trends and terminology and definitions. We want to produce an event where these things come to life so it’s clearer to the buyer where the opportunities are. How are the current characteristics of truly premium video content evolving? Walpert Levy: Advertisers have to change the definition of what premium content is because consumers have changed. In a world where, again, the notion of premium or prime time has become personal, it’s passion that determines what is premium content. We did some research with Omnicom that showed users cared two to three times more about that than about whether it was on a preferred network or high-quality production or had traditional celebrities—things people typically think about. It’s that environment that they’re looking for and that I think marketers want to attach themselves to for both practical and emotional reasons. It’s going to shift mindsets and behaviors and drive growth. Sarah, how are you using video to drive engagement on the Twitter platform? Personette: We’ve seen it become over 50% of our business overall, and it continues to grow each and every year, and a key driver of that is the unique content. We are not just guessing around in terms of how we’re partnering with partners for the content we put on the platform; we’re actually listening to the conversations people are having. That helps to inform the content that’s produced for the platform and then ultimately allows marketers to be able to reach audience at scale. Peter, what have been some of the really important teaching moments for you in the past year regarding the advanced television future? [kickout id="6" label="quote 02"] Naylor: We’ve found that our audiences are super responsive to the direct-to-consumer marketing propositions, so that’s a big learning at a time when all those brands want to get into the TV space. You can target very tightly, and you can do a lot of experimentation with creative against an audience that’s digitally native, affluent, educated and likely to experiment. We’ve seen our direct-to-consumer brand business go up 85% as a result. John, how are you balancing AVOD and SVOD, and what has the Pluto acquisition meant for the company? Halley: We think AVOD is a really big opportunity, and it needs to be evaluated in light of what’s going on in SVOD. There are two things happening: One is that there is a rush to subscription services, and there’s a ton of them at a time when consumers are very value conscious. The fastest-growing segment of linear television is antenna-based; 14% of U.S. households have antennas, up from 10%, like, four years ago. There’s just a lot of interest in what is free. So at Viacom, we made this decision that we need to play at a bunch of different price points, and free is one of them and what underlies the Pluto acquisition. Alana, how has OTT evolved your process, and then how are you keeping pace with the youngest Gen Z viewers? Calderone Polcsa: Content production in short form overall has become more premium, and it’s really evolved. What was once unvarnished first-person storytelling are now fully developed narratives that are much more polished, and it’s happening across all genres. So as we develop content that is exclusively for our digital audience, we’re going to stay consistent with the overall Ellen brand, which is fun, funny, kind, but we’re going to start to tell deeper stories. Our hope is that the audience will see themselves reflected in those stories. Tara, what do you think brand marketers are underestimating, potentially at their own peril, about the video space right now? [kickout id="7" label="quote 03"] Walpert Levy: I think you do need to think more holistically about creative. We know that more relevant ads drive three times the results of standard ones. We know that an ad built for the phone doesn’t look as good on the TV screen, and vice versa. And I think with creative driving 70% of the results no matter what medium you pick, making sure that you are as a brand where your consumers are, which will not happen if you treat the upfront the same way you always have, and that you are taking the insights that are available from those platforms and using it to build the most relative creative, is what is going to differentiate winners from losers. Alana, from your perspective, how has the definition of partnership evolved for you and especially with the brand marketers? Calderone Polcsa: We’re finding from a partnership standpoint alignment, content alignment, contextual alignment—however you want to call it, it’s increasingly more important. Take, for example, a partnership that we had with Total Wireless. Their communication strategy was around having Total Wireless gives you total confidence. So we had naturally aligned them with a property that we have called Fearless that stars Ashley Graham, and she’s inspiring confidence for you to have total confidence as an individual to tackle any issue. We’re seeing a lot of those RFPs come in, those requests for “Hey, we’re thinking our whole campaign is around experiencing life’s first evers. Can you help develop a series or content around that?” What’s your sense of the media buying community’s mood right now, and how do you think they’ll be approaching the NewFronts? Bager: We see very senior media buyers, actually a lot of advertisers too, participating in more and more of the presentations. And I think, again, moving it down to a week will help with that as well. It’s part of the upfront season. You have to look at it, you have to think about it, you have to think not just about original content and shows and traditional ad placements, you have to think much more broadly about content with these audiences. What are your perspectives on the consumer, and how are you going to try and meet them and their needs? [kickout id="2"] Personette: Hyper focused on conversation and on consciousness. From a conversational perspective, we want to enable conversation to be a lot easier between people as well as between brands and between content providers. Today that’s a natural state on Twitter, but it can be even easier and faster, it can be even more fluid. On the conscious side, I think consumers are more conscious than ever before, they’re more aware of what companies are doing, they’re more aware of what brands stand for and they are making choices as a result of that consciousness. We have to strive to enable brand purpose to really shine. I think conscious content creators will probably be a key theme at the NewFronts. Naylor: We like to segment and talk about linear and OTT and put everything in a bucket, but what we observed when we launched our live service is that people will blend their habits. So we talk about how the business needs to be video agnostic. Consumers are already, and there they blend live and on demand seamlessly all day every day. Walpert Levy: My husband is a lawyer, so he’s not in the business. I think it was, like, two years ago, he was watching NFL highlights on YouTube on the television in our living room, and I asked him, “So do you consider that TV, or do you consider that online video?” And he just looked at me like I was out of my mind and said, “Only you people are talking about that; we’re just watching TV.” [kickout id="5" label="quote 1"] Halley: Building on that, we shouldn’t confuse OTT with cord-cutting. The typical Comcast household goes through 150 GB a month, and they have 11 connected devices. It’s not cord-cutting; users are bundling their own content libraries. And I think that’s very interesting and it does go to the questions around SVOD: How many of these things do people want to own? I think that’s a critical question around SVOD, particularly with a couple of big players coming in with new products. So looking forward to the NewFronts, what do you think the most important takeaway or headline is going to be from the week here in New York? Calderone Polcsa: I still think brand safety is going to be paramount, and as I mentioned earlier, it’s going to evolve where advertiser vulnerability is not acceptable. They’re going to want to be in control, and so they’re going to seek out content platforms, product innovations that they can trust and that will be efficient. Naylor: The headline at the end of the market when people transact is that you’re going to see a real share shift. There’s only so much budget to go around. We’ll enjoy double-digit growth, all of us, but it will be at the expense of someone else losing share, and marketers will follow the audiences. Walpert Levy: What I’m hearing already is that people are remembering why we do all this in the first place, which from an advertiser perspective is about building their brands and building their businesses. And if you want to do that, you need to be where audiences are, you need to be connecting with them with content that they are most passionate about, and you need to be doing it in ways that take advantage of these new capabilities around the ways that you personalize and the creative you build for them and measuring it in a way that really tells you the impact that you’re having. And in a world where DTC clients are fast on this train, I think the rest of the market is realizing from a competitive standpoint it’s no longer become interesting and exciting and nice to have—making these changes is a really must-have to drive business outcome.