Digital Darling Languishes at NBC

Network Slow to Integrate With iVillage, Lauded as Centerpiece of Strategy

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NEW YORK (AdAge.com) -- A year ago, NBC Universal announced the $600 million acquisition of women's portal iVillage, closing the deal just in time for NBC's upfront presentation, dubbed "Television 360." But since then, the pace of integrating iVillage with NBC properties has been more akin to dial-up than broadband.
IVillage President Deborah Fine says the No. 1 reason people visit the site is for community around subjects such as beauty and health. The trouble is today's communities want much more than those of a decade ago
IVillage President Deborah Fine says the No. 1 reason people visit the site is for community around subjects such as beauty and health. The trouble is today's communities want much more than those of a decade ago

In interviews last year, Beth Comstock, now president of NBC Universal integrated media and the executive who spearheaded the deal, said: "We look at iVillage as the centerpiece to our digital strategy. It gives us scale and a platform and a new forum for engaging with consumers and creating a different kind of experience with our content."

With this year's upfront sales period fast approaching, the next few months will help decide if the portal -- launched in 1995 by Candice Carpenter -- can ever become NBC's digital crown jewel.

Stagnant traffic numbers
Traffic numbers in the year since NBC acquired iVillage have been stagnant. Despite help from NBC's powerful promotional juggernaut the "Today" show, iVillage has barely bumped up its number of monthly unique users, which has been stuck at around 15 million. It's unclear if new users are arriving as older ones are rejecting changes at the site and leaving.

IVillage should also benefit from the syndicated TV show "iVillage Live," which launched on Dec. 4 and is carried by the NBC-owned and -operated stations. But traffic to the site actually decreased to 13.5 million unique users in December compared with 14.4 million in November.

"NBC is trying to change the tires while the car is still on the road," said one web executive who is familiar with iVillage's attempts at carefully remaking the site.

Even at the very top of GE, the purchase has come under scrutiny. Chairman Jeffrey Immelt said at an internal meeting in November: "You know, we probably overpaid for iVillage, but we've got an asset that can grow 30% a year for as long as the eye can see. ... Is it as sexy as other things online? No. But is it something we can add a ton of content with and make good money over time? Absolutely."

According to iVillage President Deborah Fine, the No. 1 reason people visit the site is for community around subjects such as beauty and health. The trouble is today's communities want much more than those of a decade ago.

Beta-testing social-networking tools
Instead of just message boards and e-mail, visitors want tools to help them mash up videos of their children dancing to Shakira. They want to write their own blogs about the best strollers, and they want much smaller communities that are centered on their interest groups. And while NBC is helping iVillage get there by investing in a raft of new products expected to launch in the coming months -- social-networking tools are in beta on the site -- it is facing a growing onslaught from women's publishing giants such as Martha Stewart Living Omnimedia, Meredith, CondeNet and Hearst, all of which are armed with growing video portfolios.

"Offline properties like CondeNet and Hearst are sliding into their space," one executive said. "Scripps' stuff like Food Network and HGTV are competing for the same audiences. IVillage has all that in their channels, but they're not perceived as the food place or the beauty-and-style place."

Ms. Fine, who joined only six months ago, admits "the status of the technology was no secret." She also stresses that many new tools are in the hopper that will make iVillage more interesting.

Even so, in the next three months, iVillage will end content partnerships with a number of Hearst magazine brands, such as Cosmopolitan, Redbook, Marie Claire and Country Living, which it currently hosts.

Ms. Fine pointed to new partnerships that will replace the Hearst titles that iVillage is losing. She mentioned a recent deal to create a wedding area with website The Knot and plans to add a co-branded gaming channel in partnership with Electronic Arts. A new website for "Today," launched at MSNBC.com last week, also links to iVillage content.

TNS Media Intelligence reports that iVillage ad revenue was $40.9 million in 2006. To put that figure in context, NBC Universal has said it aims to reel in around $1 billion in digital revenue by 2009.

Ad sales are a bright spot
Static usage patterns apart, ad sales appears to be a bright spot, and advertisers have said they like the collaborative approach under Peter Naylor, senior VP-NBC Universal digital-media sales. He says display advertising is up 45% and video is "white hot." Pharmaceutical spending is strong. Corporate parent GE is also a big presence at the site, offering health-related content and links to its site.

In a Long Tail world, iVillage still offers a mass audience. Advertisers can buy any of 16 pieces of video content syndicated around NBC's female-oriented sites, such as AccessHollywood.com. Marketers can also have a presence on third-party sites that are part of the NBC syndicate.

California-based ad agency RPA bought a 15-second pre-roll ad around iVillage's syndicated video product for client Honda in February. "We haven't done anything since 2004. The [NBC/iVillage] partnership has helped facilitate additional conversations and they're working together to give more reach," said Lauren Mehl, RPA's associate media director.

Mr. Naylor said iVillage has also set up online classes involving American Express and Sony to help people who are interested in finance or photography -- the kind of "hand-holding that advertisers love."
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