NEW YORK (AdAge.com) -– NBC Universal is planning to invade one of the female-only bastions of the Web -- and some Internet insiders think that's a plan doomed to fail.
NBC Universal Buys iVillage to Use as Its Web Base
Plans to Widen Appeal From Women Only to Mass Audience
Last week, when NBC Universal announced its acquisition of iVillage for $600 million, it said it would open the female-centric village to the world at large. The strategy is to broaden iVillage's appeal to men once the acquisition is complete in the second quarter of this year, as it positions the site as a hub for NBC Universal's digital play.
"This is a real important one -- this is a base for us," said Jeff Zucker, CEO, NBC Universal Television Group. The plan is to "use a base that's well-known for women as a way to start creating new, vibrant communities that go beyond women," Beth Comstock, president of NBC Universal Digital Media and Market Development, said on a conference call last week. IVillage said it currently has 10.9 million users, the majority of them women, and NBC Universal's digital properties have a combined 9.4 million users, according to Nielsen/NetRatings.
Cornerstones to digital strategy
With the merger, NBC is following other media companies in a race to acquire strong Internet properties that can be used as a cornerstone of a corporate-wide digital strategy. News Corp., for instance, bought social-networking site MySpace.com for $580 million and gaming site IGN Entertainment for $650 million. The New York Times Co. acquired About.com for $410 million.
In the conference call, Mr. Zucker and Ms. Comstock said NBC Universal plans to stream video content from its multiple properties like the "Today" show that relate to the interest categories currently on the site -- beauty and style, health, diet and fitness, love and sex, pregnancy and parenting, home and food, entertainment and Hearst magazines -- and then expand the categories to widen the site's appeal. NBC will also produce original content "immediately," said Ms. Comstock and NBC Universal will promote iVillage on its TV shows.
NBC will reach beyond women on iVillage by beginning with the girls and teenagers who use iVillage's Gurl.com, and also reach out to fathers who frequent the parenting section of the site.
Strong advertising program
NBC is most attracted to iVillage's strong advertising program supporting one of the most successful online communities on the Internet. IVillage earned $9.5 million on sales of $91 million last year, and sells ads to a roster of brands from the food, automotive, entertainment and retail sectors, said Doug McCormick, president-CEO of 11-year-old iVillage. (NBC Universal, which owns sites for each of its media properties, such as nbc.com and telemundo.com, had digital revenue of nearly $100 million.)
In its chat rooms, users have formed 1,500 groups on everything from fertility to reaching out for support because one's kids are driving them nuts. "You cannot flip a switch and get that -- it's got to be built over time and with trust," Mr. McCormick said. "Women are particularly good at ... helping someone for the sake of helping. For the iVillage, it creates a wonderful halo around the brand."
But some believe making iVillage more appealing to men will dilute the brand, said Mike Vorhaus, managing partner, Frank N. Magid & Associates. "My sense would be to keep the iVillage brand as a very powerful women's brand," he said. "If you want to do for men what iVillage does for women, build a new brand that uses the NBC brand."
There's no question that NBC Universal needs to get more eyeballs focused on the site. Gregory Saks, senior associate at Compete, said NBC is paying about $135 per iVillage user. "In order to justify that price tag, NBC Universal will have to grow the user base -- or increase the level of engagement per user," he said.
'Double our audience'
Currently, iVillage reaches one-quarter of the women on the Internet every 90 days. "If we can get them to come every month, then we'll double our audience," Mr. McCormick said.
Good thinking, said Mr. Saks. "Finding ways to further engage and get the existing demographic to spend more time on the site seems to be the low-hanging fruit."
Otherwise, NBC risks alienating its best customers. Magid's research has shown that "women online want to be treated like people online -- we have heard many women say in focus groups that they are willing to go to a site focusing on women for [niche areas] health, mothering or parenting, but not [general areas like] news, finance or sports for women," Mr. Vorhaus said.
NBC should target its other female-skewing assets to build iVillage, such as the "Today" show or "The Biggest Loser," said Eric Valk Peterson, VP-media, Agency.com. "There's certainly crossover [from offline media to iVillage] but also a lot of unduplicated audience. I don't know that males are ever going to flock to an iVillage brand."