Wednesday, February 22, 2012, 2:36 PM ET|Posted by Will Richmond
Five of the top 10 online video destinations - AOL, Hulu, Microsoft, Yahoo and YouTube - are joining with ad agency Digitas to launch the first-ever "Digital Content NewFronts" (DCNF). The DCNF's goal is to "shape a new and practical marketplace for connecting the wealth of native digital content with brand marketers and their media and marketing agencies." From April 19th to May 2nd, each of the 6 companies will host a day-long event in NYC showcasing their programming and ad opportunities. The DCNF actually builds on the 1-day NewFront event Digitas has been holding for the last 3 years.
I think the combined approach of the DCNF is the right idea at the right time. Given the wealth of premium original online video that each of the 5 destinations is pursuing - all of which is ad-supported - the DCNF could become an important catalyst in educating advertisers and agencies about these new opportunities and therefore why they should shift some of their spending. As I've recently written, a bevy of Hollywood A-listers and others are getting involved in original online video productions, helping create a "virtuous cycle" of anticipated growth.
The key to all of this original video succeeding is being able to monetize it effectively. While the forecast for online video ad spending is $7.1 billion by 2015, actually achieving anything close to it will require a massive amount of work by the industry's main players and others. So, even though the 5 companies compete with one another for ad dollars - just as the TV networks do - they seem to correctly recognize that "a rising tide lifts all ships." Banding together to educate the buy side helps each more than by trying to solely go it alone. In this sense the DCNF is modeled on the TV networks' traditional "upfronts" where billions of ad dollars are allocated each year.
While we'll need to wait and see how the DCNF unfolds, it looks like a step in the right direction as well as a sign that the online video industry is continuing to mature. As online video viewership further scales and devices proliferate, there will inevitably be even more audience fragmentation. Monetizing those eyeballs is priority #1 for anyone investing in originals.