Bloomberg reports shows such as “The Simpsons” and “CSI” are for the first time commanding higher ad rates at websites including Hulu.com and TV.com than on primetime TV. The premium rates in the just-ended 2008-2009 television season are mainly for shows that rank among the most-watched by Nielsen, said David Poltrack, chief research officer at CBS Corp.
Marketers, who are now considering commitments for the 2009-2010 TV season, are willing to pay more because TV.com and Hulu.com, owned by investors including News Corp., NBC and Disney, provide committed viewers who actively seek out shows. There are fewer commercials, and consumers are twice as likely to recall web ads, Poltrack said, citing Nielsen.
“The reason people are paying such a high premium for these ads on the Internet is they do have a captive audience,” Poltrack said. “You know you have eyes on the screen.”
The challenge for the networks, whose total prime-time audience shrank 3.6% last season, is that web viewing and ad sales, while increasing, are still too small to replace traditional revenue sources.
Marketers typically pay $20 to $40 per thousand viewers for a prime-time ad. On Hulu, which began offering shows to the public in March 2008, an ad on the animated series “The Simpsons” costs $60 per thousand viewers, Michael Nathanson, an analyst at Sanford C. Bernstein & Co. wrote in a 6/18 report.
“It ends up being twice as expensive in the Internet world,” said David Cohen, U.S. director of digital communications at Universal McCann.
That isn’t deterring companies from buying time.
Intel has shifted spending to sites including Hulu, which streams TV shows from NBC, Fox and soon ABC, as part of a $100 million worldwide marketing campaign, the story said.
News Corp., Disney and NBC sites, including Hulu, ranked among the 10 most-visited for videos in the U.S. in March, according to ComScore, showing the companies are retaining viewers migrating to the Internet. Time Warner and Viacom, both based in New York, also have top 10 sites, as does CBS.
Poltrack said lower-rated shows won’t command the same prices as popular programs, and that ads on those series aren’t any more valuable than basic, static banners on Web sites.
“This is about scarcity,” Poltrack said. “All of the networks who are now streaming online have multiple advertisers competing for a small supply of premium programs. That premium content is what advertisers want.”