Buyers Flocking to Online Shows

Sep 25, 2006  •  Post A Comment

Advertisers moved slowly when it came to buying commercials on the broadcast networks during the upfront last spring, but they’re springing into action to advertise during those very same shows when they’re streamed over broadband.

NBC signed up seven sponsors within a week of announcing it would have replays of its shows available on its Web site. Within 24 hours after CBS announced plans to have seven of its prime-time shows on its innertube broadband site, General Motors, Cingular, Paramount Pictures, Target and Pfizer signed up, selling out those availabilities for the first two months of the season. Earlier this month, CBS put another six shows on innertube, and added AT&T Universal Pictures and Procter & Gamble to its roster.

These broadband moves followed ABC’s online test last season, which involved 10 advertisers that paid between $150,000 and $200,000 apiece to advertise on shows streamed on ABC.com, including “Desperate Housewives” and “Lost.” ABC is seeking 40 advertisers to sponsor a bigger list of shows on ABC.com this season.

AdAge.com reported Friday that 35 advertisers have signed on for ABC.com’s new season, among them Verizon, Toyota Motor Sales and Century 21, citing as sources executives with knowledge of the new offering.

Toyota had been part of ABC’s original test, which was also offered on a limited basis to AT&T, Ford Motor Co., Johnson & Johnson, Pfizer, Procter & Gamble Co., Unilever’s Suave, Universal Pictures and Walt Disney Pictures. Unilever had also commented publicly that it had a very positive experience and was looking at future opportunities with ABC.

ABC declined to be specific about how many sponsors have signed up, but Anne Sweeney, president of Disney-ABC Television Group, said at an investors conference that advertisers bought all available ad space on the new version of ABC.com for this quarter, “even without knowing which shows we were going to stream on the site.”

While there is much hoopla over ads on broadband and other new media, Nielsen Media Research last week reported that television usage is still growing. Individual viewing grew to four hours and 35 minutes per day during the 2005-06 season, up three minutes from the previous season’s record levels. The average viewer watched the same amount of prime-time TV-one hour and 11 minutes-as in the previous year.

Nevertheless, putting shows online “is pretty much the trend in the broadcast networks,” said Kari Hooper, associate media director for Starcom. “All of this stuff is in high demand, being as there are advantages of being first movers with networks on new products, so we want to make sure we form strong partnerships.”

But each network has its own way of packaging its online shows. “There are different approaches in pricing and connectivity between broadcast and broadband, and elements of research and insights that could be gleaned,” said Amanda Richman, senior VP and group director of strategy development and innovation for MediaVest.

NBC, for example, is selling 15- or 30-second pre-roll ads that appear prior to each segment of the show (the network is cutting up the shows into acts, making them easier to load), according to Vivi Zigler, executive VP of digital for NBC Universal.

She said NBC is first offering ads in online shows to advertisers who sponsor those shows on broadcast. “This obviously was not part of the upfront sales, so in order to be respectful of those charter advertisers, Internet sales in conjunction with network sales are going to those advertisers first,” she said. “They’re obviously people who bet on us early on, and we owe them that.”

Based on focus groups, viewers on NBC.com are passionate about wanting to watch the shows they watch online. “You have to actively go online to watch a show on your computer, and I think that engagement factor is what we hear from advertisers that they’re responding to. They want to reach those people,” Ms. Zigler said.

CBS also is selling pre-roll ads, but ABC is selling pods and is encouraging clients to be creative in filling them with interactive advertising since the viewer is already online, Ms. Richman said.

“The bigger opportunity is how do you take them from the pre-roll viewing into really paying that off, whether that’s through a game, through an exclusive experience that’s developed around the product and the programming, or the type of exclusive video outtakes and inside track on the stars that we seem to so crave,” she said.

Pricing issues still need to be worked out. Putting shows on broadband is new, and networks consider the current models tests, but buyers say based on what they’ve seen so far, costs on a traditional cost-per-thousand-viewers basis are fairly high and the networks aren’t offering the kinds of audience guarantees they make on broadcast.

But at this point, buyers’ concerns about pricing are being trumped by marketers’ demands to try new things.

And it remains to be seen how large an audience these shows will attract online, though ABC, for one, said its test exceeded expectations, receiving requests for 5.7 million episodes and generating about 11 million ad impressions.