Online Ad Rates Higher On Certain TV Shows Than TV Ad Rates

from the go-simpsons dept

Mon, Jun 29th 2009 9:42am — Mike Masnick

We were just being told by a supposedly respectable media analyst that things like Hulu were anti-American, because it gave away content for "free" and could potentially bring down the entire media business. Yet, it appears that media businesses are learning how to monetize that online content quite well. Bloomberg notes that for shows like The Simpsons and CSI, online ad rates are actually higher than TV ad rates. There are good reasons for this, including the fact that advertisers recognize viewers of shows online are more committed to the shows -- in that they actively chose to seek out and watch that show, as opposed to just having the TV on in the living room while doing something else. Also, people are more willing to watch those ads, in part because they're shorter and they don't have to watch as many to get to the content they want. Now, it is true that the number of viewers still represents a substantial difference and that media companies rely heavily on carriage fees from cable companies and the like. But the idea that ads can't support TV shows online doesn't seem to be based on anything in reality.

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Filed Under: csi, online ads, simpsons, tv ads

11 Comments

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spencerMatthewP, 29 Jun 2009 @ 10:36am

Hulu Did what I thought was impossible
I almost couldn't believe it at first. There I was watching the latest season of SG-1 released to Hulu. An ad came on, I turned the volume up to hear what they were saying. I did this 2 or three times until I realized it. I was paying attention to the ads. Prior to this Hulu was going the route of CBS. Making the ads 10 times louder than the show. When the ad came on, I muted it, and went to surf the web for a while. Now with the quieter ads, I'm amazed that I'm actually paying attention to what they're advertising. Amazing. In other words, Hulu is giving their advertisers far more bang for their buck than regular TV, or any other web service like it. Congratulations Hulu, and thanks for saving my ears.
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Anonymous Coward, 29 Jun 2009 @ 10:43am

If you read the article though it says that there's only 37 seconds of commercials on average on a hulu show while 9 minutes on TV. I doubt advertisers would be willing to pay $60 grand to be part of a 4 minute block of ads on hulu. I fear people will read this and think that this means that advertising online brings in just as much, at least for some shows, as TV. It doesn't by a long shot.
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- Anonymous Coward, 29 Jun 2009 @ 11:11am
  
  Re:
  logic error
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- some media producer guy, 29 Jun 2009 @ 11:32am
  
  Re:
  agreed with the above comment. Although the rate of the commercial is higher for some shows on Hulu than on tv, the fundamental principal of Hulu is having a smaller number of ads. Thus, although ad space cost is more, the return to Hulu (and thus the return to media producers/production houses) is less because there are far less ads, meaning less overall advertising money collected.
  
  The reason why big name content producers like NBC, FOX get mad at things like Hulu is that when Hulu began they saw the website as a source of EXTRA ad money from the online streaming. However, with apps like Boxee and Hulu Desktop slowly threatening to replace conventional tv. Not only does that scare Cable companies whose business models are based on selling premium content (ie cable packages) it scare large name content producers because it could replace their original tv commerical ad return, with the online commercial return, which as I mentioned is much less.
  
  It will be interesting to see what happens in the long run. I think in the future shows may be given smaller budgets to compensate if they are going to lose large areas of ad space from online streaming. This might mean more reality shows and less big budget shows like Lost.
  
  I also predict more product placement in tv shows. The intergration of ads and content is the only way to ensure to advertisers that people are watching the ads. Don't be surprised when you favorite sitcom characters start asking for their spouse to grab them a can of coke from the fridge, or if sent in their checks for the AllState insurance bills.
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  - chris (profile), 29 Jun 2009 @ 11:58am
    
    Re: Re:
    I think in the future shows may be given smaller budgets to compensate if they are going to lose large areas of ad space from online streaming. This might mean more reality shows and less big budget shows like Lost.
    
    or you could just figure out how to deliver quality entertainment with fewer costs.
    
    I also predict more product placement in tv shows. The intergration of ads and content is the only way to ensure to advertisers that people are watching the ads.
    
    it can't get any worse than chuck. it's a giant commercial for bestbuy, subway, dell, and toyota. i am waiting for the episode where they have gunfights with subway sandwiches instead of pistols.
    
    i think that product misplacement (or anti-placement) would be fun: get paid to put bad placements into shows: food that makes people sick, cars that break down, gadgets that malfunction, etc. competitors could bid to either run the ads or take them out of the show.
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    - hegemon13, 30 Jun 2009 @ 7:37am
      
      Re: Re: Re:
      And yet Chuck remains a great show because the writers are good enough to incorporate the product placement into the story. (Best Buy, though? I don't think so. The Buy More is a parody of Best Buy, not a product placement.)
      
      Product placement probably will be a big part of the future. Some shows will do it right, and some will be ridiculous. So, just like now, some will succeed and some will fail. If product placement is done right, it does not have to be intrusive. We run into brand names every day, so it does not have to take you out of a show to see a brand name. It does take you out if it is done Transformers-style (Hey, look! This SD card I'm holding is a SanDisk! Let me hold it up to the camera so you can see!)
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Chuck Norris' Enemy (deceased) (profile), 29 Jun 2009 @ 10:53am

Will networks take heed?
The questions networks should ask themselves is what if we scale back the ads on broadcast tv since a few (1-3) ads tends to keep viewers watching instead of flipping the channel, going to the kitchen to make popcorn, or any other activity that they would willingly exit the room since they knew they had five minutes before the show started again.

I watched the show Fringe on Fox a couple of times and at commercial break they would say, "Fringe will return in 30 seconds," or 60 depending on the break. They would either have one 30 sec ad or two 15s. Plus, it didn't seem like they increased the number of breaks. I wouldn't even bother muting since that takes about 5-10 seconds to find the remote. So I would sit through the ads.
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Anonymous Coward, 29 Jun 2009 @ 11:08am

love Hulu desktop app
I have been watching the hulu desktop app (and having it ditributed to all my SD TVs) and love it. I actually do not mind and do watch the couple of commercials that are shown during the show. With there being only one ad during each break (same number of breaks as regular broadcast) and that they are only 15-30 seconds long, I don't care and some of them are even "fun" to watch. Between hulu and OTA it is a helluva better watch my shows and not pay Comcast $70/mo.
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Phillip Duggan (profile), 29 Jun 2009 @ 11:27am

Fox's Short Ad Breaks
My understanding is that the shorter ad breaks on Dollhouse and Fringe was an experiment that failed in their minds. I think they're going to go back to the normal TV schedule for next season of Dollhosue at least.
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Anonymous Coward, 29 Jun 2009 @ 12:27pm

"in part because they're shorter and they don't have to watch as many to get to the content they want."

No, actually, it is mostly because they create players that absolutely lock you out of the content until you watch the ads. I cannot picture it being very profitable to hold a gun to people's heads and force them to watch an ad just to pay for the content. CNN does this, and for the most part, I totally tune out the ads. So whatever they are paying for those ads is a waste, I am not paying attention, not matter how much they try to force me.
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Anonymous Coward, 23 Oct 2009 @ 2:51pm

or you could just figure out how to deliver quality entertainment with fewer costs.

That's exactly what he was implying, you snarky shit. A drastic lowering of advertisement and DVD revenue will obviously preclude higher budget offerings like "Lost". That doesn't mean there won't be "quality entertainment", it just means there won't be BIG BUDGET "quality entertainment" like "Lost".
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