NEW YORK (AdAge.com) -- If you like watching "Vampire Diaries" or "Gossip Girl" online with relatively few ads to interrupt the action, you may well be out of luck. The CW, the network that runs those programs, intends to run just as much advertising during shows viewed online as it does on TV next season, according to an executive familiar with the plans.
The move is the first tangible sign that media companies, besieged by ratings drop-offs for their traditional TV programs, will likely force new ad intrusions on consumers who had grown accustomed to seeing less commercial clutter online.
"It's something we kind of expected to happen," said Rino Scanzoni, chief investment officer at WPP's Group M. "I wouldn't be surprised if you start seeing some of the other networks kind of move in that direction."
Indeed, the executive familiar with CW's efforts said the network intends to make the case to advertisers that they should no longer see any difference between buying an ad that accompanies a traditional airing of an episode on TV or a stream of that episode online.
All TV networks received an incentive to equalize their TV and online ad loads earlier this year, when Nielsen announced plans to provide commercial ratings for shows whether they appear on television or on the web. The combined ratings will become available for evaluation this September and are meant to become the basis for ad negotiations next February. For Nielsen to be able to provide commercial ratings that way, however, shows seen online will have to include the same group of commercials that run on TV.
The executive familiar with the CW's decision, which was first reported by The Wall Street Journal, said the change was not spurred by the Nielsen plan. The network started pondering the idea just after the start of 2010, the executive said, after the network noticed positive growth online for programs such as "Vampire Diaries."
Why the CW moved first
But the CW may be able to make the move more easily than its older broadcast rivals. It tailors its programming to women in their teens and 20s, a category of consumer that is more familiar with new technology that the audiences of networks such as CBS, ABC, NBC and Fox. Its TV audiences are also typically smaller than the TV audiences generated by other broadcast outlets. Realizing that its online audiences were often comparable to its audiences on TV, the CW had actually already increased the number of commercials during its online ad breaks, going to two from one in December, according to the executive familiar with the new plans.
The CW's plan also is bolstered by the fact that the network, owned jointly by CBS Corp. and Time Warner, does not syndicate its current programming online. CW shows are not available on Hulu, for example, only at cwtv.com.
And there is another factor at play: CW suffered a tremendous drop in ad revenue in 2009. Its ad sales dropped a whopping 25.2% last year, falling to approximately $590.5 million in 2009 from $789.5 million in 2008, according to Kantar Media. The network gave up its Sunday-night programming in late 2008.
Despite all that, the CW's move runs contrary to the evolution of online TV distribution so far. Hulu, the online-video site owned by NBC Universal, News Corp. and Walt Disney, runs significantly fewer ads than one would see watching TV. And Disney's ABC.com has met with some success by running ABC shows with just a few ads, often from a single advertiser.
Web TV changing course?
Group M's Mr. Scanzoni said consumers' growing ease with content delivered online and via mobile devices is changing the nature of the TV business. Marketers, too, are growing accustomed to the idea that their ad vehicles are no longer just distributed for viewing at a certain time and date. And as technology improves, Mr. Scanzoni suggested, advertisers will push to align more specifically with content and also update their ads so consumers see timely messages whenever they choose to watch something.
The network's sales team is likely to tell advertisers that they "don't want to be in one place or another to get our audience," the executive said. The network intends to use online-impressions data from DoubleClick as well as Nielsen VideoCensus data to give advertisers a sense of how its shows are watched online.
Even with the plan, the CW intends to protect its TV ratings -- which still lure more dollars than any online metric. The executive said the network would wait 75 hours after the debut of a new episode on TV before making an online stream available on its website. That policy would help CW bolster its so-called commercial ratings or "C3," the industry term for viewers who watch a show within three days of its debut and don't skip watching the commercials.