Upfronts 2008: Will Anyone Buy Online Ads?

The network TV upfronts — the weeks-long sales cycle where the broadcasters try to sell 80% of their inventory for the next year, for some $9 billion — begin next week. Online ads are often sold as part of upfront TV packages, but in the past they’ve been a rounding error in the procedings. But this year there is plenty more TV online than last year (Hulu et al), so does this mean more digital ad dollars in the upfront?

Three takes out of the Interactive Advertising Bureau’s digital video conference in New York:

Yes, advertisers will be buying more online with their TV this spring. CBS interactive chief marketing officer Patrick Keane argues that advertisers will increasingly want to couple broadcast buys with online buys for the same shows: He says out that 90% of advertisers in CBS’ March Madness basketball tourney bought both on TV and online.

Maybe, but more big ad categories would have to increase their digital spending. Deep Focus CEO Ian Schafer argued that for online to win a bigger share of the pie, more advertisers — specifically, packaged goods brands — need to come into the market. When they do come in, they tend to want to develop branded content, which isn’t typically sold in the Upfront.

No, because online video has gotten too expensive. An exec in the audience from Atlas, Microsoft’s ad serving system, said he’s seeing advertisers opt out of professional online video because the ad rates — in many cases higher than network TV —  are too high. He said advertisers are balking at CPMs in the “high $20s” (the cost to reach 1,000 people). Broadcast ad rates are generally in the low $20s per thousand.

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