Upfront Funk: Will This Year's 'NewFronts' Bring Record Ad Dollars Into Music Industry?

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Pharrell Williams performs on stage at Google presents YouTube Brandcast event at The Theater at Madison Square Garden on April 30, 2014 in New York City. 

When TV's "upfront" advertising marketplace dropped 6 percent to $18.1 billion in 2014 -- the first year-over-year decline since 2009 -- several factors were to blame. Time-shifted viewing has consistently risen (40 percent of all U.S. homes paid for video on-demand services as of November 2014, according to Nielsen), and Netflix reached a record 57.4 million global subscribers as of Dec. 31. Also, with concert and festival attendance reaching 20-year highs, music is posing an added threat to TV’s longtime stronghold on the ad market.

"TV is not dead, it's just going through growing pains," says Olivier Gers, global president of Starcom MediaVest Group’s Liquid Thread. "But what's interesting is the need to watch content at a specific time and place is increasing quite rapidly, there’s just been a shift in behavior to become less about TV and more about video."

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That's great news for music-related programming, with brands already spending record dollars on live events ($1.3 billion, according to analytics firm IEG) and music video product placement ($156 million, according to PQ Media) in 2014. But will the digital “NewFront” presentations in New York designed to compete for TV dollars -- including iHeartMedia (a "SoundFront" was held April 22), Yahoo (April 27), Vevo (April 30) and Vice, with help from Live Nation (May 1) -- keep the momentum going? Ad buyers are cautiously optimistic.

Consider Honda: In the summer of 2014, the automotive company announced a landmark strategy to shift its entire $50 million cable ad budget into the music industry. Teaming with iHeartMedia, YouTube, Vevo, Live Nation and Revolt, the company’s Honda Stage platform was designed to replace TV-level reach with millions of online video views. But after Honda racked up just 50,000 views during its YouTube channel's first month, "we very quickly had to learn how to adapt with our partners," says Tom Peyton, American Honda's assistant vp advertising and marketing. "The music industry is not for the faint of heart. I’m happier being an advertiser than a content curator."

Still, Honda's results improved after programming from iHeartRadio and Live Nation kicked in, eventually totaling 100 million organic views, 350 million paid views and nearly 1 million views on its core YouTube channel. Peyton confirms the Honda Stage will return for a second year. “It really has turned into an alternative to TV for us.” As for that $50 million price tag? “We had a large investment in year one, and we’re going to continue with that large investment in year two,” he adds, declining to discuss figures.

With Yahoo expected to announce the fate of a renewal for its 365-day live-streaming concert series at its April 27 presentation, expect its promoter partner Live Nation to be a big focus of Vice’s May 1 NewFront, where new details of a joint digital content venture announced in November are expected to be unveiled. Claudia Cahill, chief content officer at media-buying firm Omnicom Media Group, says the two companies' initial pitch to advertisers “is something that could be really interesting," but noted that their concepts seemed “pretty nascent. I think we’re gonna keep our eye on that one and see how it evolves.”

Instead, Cahill will be looking to announcements from companies like Buzzfeed, Twitter and Vevo “that really specialize in going a lot deeper with content for consumers around music” that can help optimize a big TV buy for platforms like the Grammys, Super Bowl or the CMA's for her client Pepsi. "We like to call it predictive real-time marketing: instead of trying to force a dialogue and make your brand sound cool, we're always looking for partners to help add some value back to that conversation."

Morgan Buksbaum, senior partner-vice president at Group M's MediaCom ESP, expects streaming services like Spotify, Pandora and iHeartRadio to factor heavily into NewFront-related plans as well, with ad-supported music streaming revenue posting a 30 percent year-over-year gain in 2014. "[They']re offering more sophisticated targeting capabilities to brands, along with events and content extensions," he says. And with Universal Music Group recently teaming with Havas for a large-scale data alliance, expect the major labels to "continue to push the boundaries of what opportunities they can offer brands from a marketing perspective," Buksbaum adds.

This article first appeared in the May 2 issue of Billboard.