Toyota is the presenting sponsor of People magazine's latest foray into digital video, "People Now," a daily 20-minute web show that begins today on People.com.
"People Now," which streams live at 8:30 a.m. E.T. Monday through Friday, sounds like the type of celebrity-news show found on a TV network. Host Jeremy Parsons and correspondent Abbi Crutchfield identify the five celebrity stories of the day, check in with the magazine's editors and feature celebrity guests including Kevin Bacon, Michael Strahan and Kelly Ripa. (Some of those interviews will be taped, a People spokeswoman said.)
And much like TV, where brands are often integrated into programs, Toyota will be part of "People Now," according to J.R. McCabe, senior VP-video at Time Inc.
"Toyota gets to participate in the content without changing the editorial voice," he said. Each episode, for instance, will end with the "Toyota Pick of the Day," which highlights a song, book, movie or video.
"They're part of the fabric of the show, and yet the editorial is still driven by the People brand," Mr. McCabe added. He declined to discuss how much Toyota is paying for the sponsorship or the number of impressions or views People is promising to deliver.
The sponsorship "extends into next year," according to Mr. McCabe, who declined to elaborate.
"People Now" represents the latest incursion of traditional media companies into the digital video space, with magazines looking to video to attract marketing budgets flowing in this direction. People's parent company Time Inc., which is the nation's largest magazine publisher, and Conde Nast, owner of glossy titles like Vogue and Vanity Fair, both held NewFront presentations this year to show off their video lineups to advertisers. Time Inc.'s includes documentaries from Time magazine as well as a live-streaming talk show from Sports Illustrated, SI Now, which Ford sponsors.
Since its NewFront presentation in May, Time Inc. has sold video ads to more than 70 advertisers that had not bought video with the company in the past, Mr. McCabe said.
"Video is the hot thing du jour," said Jim Nail, principal analyst at Forrester Research. "Right now video advertising opportunities associated with strong brands are still oversold and very much in demand."
Forrester estimates ad spending on digital video to top $5 billion this year and $6.3 billion in 2015, according to Mr. Nail. Brands eager to advertiser on digital video, he added, are looking to known media brands like People to avoid online ad fraud, where dubious companies serve up fake views.
"A traditional media company would probably never do that and would probably never think to do that," Mr. Nail said.
In a statement provided by a Toyota spokeswoman, Dionne Colvin-Lovely, Toyota USA's director-traditional and digital media, said the automaker is confident it's reaching "an engaged and excited target audience."
People magazine is the top-selling celebrity magazine in America, with average single-copy sales of more than 700,000 copies per issue through the first six months of 2014, according to the Alliance for Audited Media, which tracks magazine circulation. People is responsible for about 20% of its parent company Time Inc.'s total revenue, making it the largest of the company's more than 90 magazines.
People.com attracted 22.9 million unique visitors across desktop and mobile devices in July, a 31% increase over the prior year, according to comScore. The site's video views on desktop -- comScore didn't provide mobile video views -- were 2.7 million in July, more than double what it was last year.
But People's newsstand sales are down 15% compared with the previous year and overall circulation is off about 1% to 3.5 million. Print ad pages in the magazine have declined nearly 7% through the week of Aug. 25, according to Media Industry Newsletter. In January, People replaced its top editor Larry Hackett with Jess Cagle, who was managing editor of sibling publication Entertainment Weekly.
People's woes are emblematic of the broader challenges facing the magazine industry. Magazines -- weeklies especially -- are seeing sharp declines at the newsstand and an erosion of their subscriber bases. And advertisers are earmarking chunks of their print budgets for digital media, including video.
Toyota, for instance, spent $146 million on magazine ads last year, a 10% drop from 2012, according to the Ad Age DataCenter. Its outlays for unearned media, which includes digital video, were up 8.5% to $815 million.
"People Now" is not the magazine's first attempt at cracking these digital-video budgets, although it's arguably the most ambitious. In January, for instance, People created a 3-minute show called "Hackett's Crew," where Mr. Hackett and two of People's editors discussed stories from the magazine. The show was later renamed "Inside Scoop," but was ended in June, according to a People spokeswoman.