Examining New Media Ads

Apr 24, 2006  •  Post A Comment

For advertisers interested in exploring online and on-demand advertising, National Geographic Channel is offering an opportunity to learn how well digital advertising works.

Bruce Lefkowitz, executive VP of ad sales for Fox Cable Entertainment, which sells spots on the network, thinks additional research about nonlinear advertising will bring more spending to the network overall.

“Last year certain people had a toe in the water. This year everybody’s ankle-deep. Nobody’s quite jumped in yet and immersed themselves in the water. At Nat Geo we’re probably knee-deep and we think that’s a valuable competitive advantage,” Mr. Lefkowitz said.

Nat Geo’s research is based

on viewer responses

to online questionnaires. The research can test attentiveness, engagement and recall. It will allow marketers to test what kinds of ad copy are most effective.

“We’ve developed user-generated research that allows an advertiser to test the value of the spots,” Mr. Lefkowitz said.

Nat Geo’s programming lends itself to distribution on the Internet and video-on-demand and the network is increasing the amount of programming viewers can access by these means.

“From a strategic standpoint, we think not only is it smart business, it acts both as a promotional tool and a revenue tool at the same time,” said Steve Schiffman, executive VP of marketing and new media for Nat Geo.

The network is working closely with the producers of its shows to generate more programming for digital platforms.

“We are proactively talking about going behind the scenes, having the producers of our content be able to provide the making of and also provide outtakes, so that the digital experience that we provide with our content goes beyond just regurgitating what’s on the linear channel,” Mr. Schiffman said.

Brad Dancer, VP of research and on-demand for Nat Geo, said producers have been very cooperative in producing additional material.

“They tend to do anything that will publicize or promote the show,” he said. “It’s in everybody’s interest for these shows to perform and they know that by putting these other platforms against a show it drives viewership.”

“Relentless Enemies” became the channel’s highest-rated special after its producers generated buzz with an online introduction of four two-minute segments from the show that didn’t make it to the specials. “The Dog Whisperer’s” Cesar Millan created an on-demand preview for the second season of his show that appeared exclusively on Comcast’s on-demand service and promotion and directory channel. The series is the highest-rated show on the network.

Nat Geo is paying producers for digital content. The amount is not substantial because the number of VOD-enabled homes is only about 20 million.

“As the impressions increase and the business models become clearer … we’re going to be able to put more resources into creating additional content that mirrors off what we’re doing on the linear channel,” Mr. Schiffman said. “In some cases, we might think about some VOD content that might not even appear on the linear channel.”

Supply and Demand

During the upfront, Mr. Lefkowitz plans to limit the number of digital packages he makes available to advertisers. That will improve the supply and demand economics for Nat Geo and increase the number of viewers reached through each deal.

On broadband, one advertiser opportunity will be to sponsor all of the stored video clips on the channel’s site for a month. Another will be to sponsor a microsite dedicated to one of the 16 specials the network plans this year. Advertisers get a pre-roll ad up to 30-seconds long with an end slate that’s clickable through to the sponsor’s own site.

Mr. Lefkowitz will make these packages available to sponsors who buy schedules on the channel. The cost of the broadband packages is estimated at about $50,000 per month.

Mr. Lefkowitz wouldn’t confirm the cost. He said, “It’s important that you have a palatable and realistic price point to allow people to come into the water with you. And you have to be realistic in terms of the amount of traffic that’s being generated to these.” “It’s an incredibly valuable audience, but it’s certainly not a mass medium.”

The channel will make only two VOD ad packages available each month. Nat Geo provides operators with 10 hours of video content each month, and each sponsor will get ads on five hours of programming. If one advertiser is sponsoring a specific program, its ads will run during the five hours that include that show.

“This gives an advertiser a chance to extend with a program across all the platforms,” Mr. Lefkowitz said.

Nat Geo sold out its VOD advertising last year and Mr. Lefkowitz hopes the new sales strategy will bring more dollars.

Jason Maltby, president and co-executive director of national TV for MindShare, said on-demand media is a natural for Nat Geo.

“If you think about the National Geographic consumer-television, magazine, whatever-you’re thinking upscale, a little early-adopter oriented and maybe some of those platforms work for different audiences at an accelerated rate,” he said.

Mr. Maltby said there is great advertiser interest in digital media but warned that “people need to take a step back and say ‘how big is the opportunity?’ You’ve got to be proactive and embrace different ways that your consumers can interact with your message, but you need to put it in the landscape of what you’re really getting.”

Mr. Lefkowitz also said he hoped his digital offerings would increase the share of ad budgets he gets from clients.

“In its current state, it’s definitely the tail wagging the dog,” he said. “But from the probative value of being involved and getting some learning from it-and most importantly being able to really engage in a clutter-free environment with the people who are supposedly your best customers-there’s definitely a qualitative value that far exceeds the quantitative value at this point in time.”