Download SmartRSS PluginHulu Receives Good News Concerning Their Online Ad Format
paidContent has two pieces of good news for Hulu in the past week—they’re commanding not only similar ad prices to broadcast television, but also 10% of the online video ad market.
From a Bloomberg report, paidContent shows that, for some shows, CPMs on Hulu are actually greater than they are for broadcast TV. And when I say broadcast TV, we’re talking primetime, new episode, time-slot-leading network television. (None of that cable syndicated rerun stuff!) Bloomberg’s example:
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 June 18 report.
How can the Internet, with demonstrably fewer viewers (another example, the NCAA basketball championship game, drew 17.6M TV viewers and 7.52 Internet viewers), command such high CPMs?
A couple factors: first, that the Internet is so measurable. As CBS’s chief research officer put it:
“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.”
Plus, Bloomberg says, there’s an extremely scarce inventory. A typical Simpsons episode on Hulu carries only 37 seconds of advertising, versus nine minutes on television. But that also means that their overall revenues per-episode are far lower, even with more dedicated viewers. Many analysts and networks worry about television companies “cannibalizing their core business.” But maybe their core business should be shifting online.
Justifying those high CPMs, Hulu commands 10% of the online video advertising market place. Hulu is a distant third in online video viewership, after Google’s properties and Fox’s properties (including MySpace and Fox News). They have only 2.4% of the overall video market and 2.3% of the Internet’s total unique video viewers. So 10% of the online video ad market is pretty impressive.
Screen Digest’s report states that broadcasters direct control 44% of the ad market, while cable operators command 22%. “Other” controls 15% of the market, Hulu 10%, and portals 9%.
Let’s look at that again—Hulu is the only website singled out there. It commands 10% of the market by itself, while the rest of the categories listed are just that—entire categories of sites.
So where does YouTube fall in there? Screen Digest says:
In contrast, third party platforms such as YouTube, Joost and other portals, which have no direct vertical affiliation with major rights holders, nor direct access to premium content rights, will struggle to aggregate ad-supported movies and TV shows. The Hollywood Studios and major rights holders will continue to limit such deals, instead preferring to build their own syndicated ad-supported online video services – such as Crackle, developed by Sony Pictures, and the CBS Audience Network.
What do you think? Is the Internet, specifically Hulu, the future of television and video advertising? Will YouTube ever be able to catch up to Hulu in terms of monetization?
More: continued here
eWeek
Based on that what are these numbers telling us? First, they are from the equivalent of a century ago but they are simply validation that things have been bad and all of the complaining may have some merit. In fact, to hear TNS’s senior vice president of research, Jon Swallen, put it “We are now in the record books with the worst quarter in a decade.”So are we looking at a turnaround anytime soon? Swallen continuesA recovery in the media business may take time. “So far it looks like second-quarter spending is starting pretty much the same way the first quarter ended. There are hopeful signs of general economic indicators bottoming out, but the advertising sector still appears to be lagging behind”.Had enough doom and gloom for the day. Take heart Internet marketers. TNS , unlike other reports, is saying that online display advertising, which includes banners, was actually UP 8.2%. You can rub your eyes and scream “Typo!” if you want but please don’t shoot the messenger in the comment section. PricewaterhouseCoopers just reported last week a 5.5% drop in online display advertising. So who’s right? Are either right? Shall we just meet close to the middle and call it a draw for online display ads as compared to Q1 for 2008?As for Q2? Most are saying that it looks like it could be just as bad, if not worse, but there may be sentiment shifting toward some recovery in the second half of the year.Before we all bemoan the state of the advertising world across the board it is important to take in one last piece of dataTNS said the ad market was hampered by double-digit pullbacks in spending by big industries like autos and financial services.Ad spending in the automotive category slid 28%, with local car-dealer ad spending taking the biggest hit, falling almost 50%. Spending by financial services companies fell 18%.Now one wonders what actually happened in other sectors that weren’t in the news for receiving bundles of bailout cash and a lot of negative publicity for their relative incompetence. As with all studies and data it is interesting to track an overall trend but if there is no attention given to the details about specific industries that affect your line of business directly you could be missing the point or, even worse, some opportunity.Marketing Pilgrim readers work in all areas of business. What are you seeing in your industry? Are you in the doldrums like the auto and finance industries or are you seeing a light at the end of this tunnel (and you are reasonably sure it’s not a train)? Maybe a street level sampling can add something to the big picture. At least you may find out you’re not alone.Comments
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