It Surely Isn't 'Lost,' but Online Video Finds Ad Niche

Programs Not Ready for Prime Time Still Prime for Marketing Dollars

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NEW YORK (AdAge.com) -- Gary Vaynerchuk, host of web-based "Wine Library TV," isn't your typical talking head. To introduce himself, he spits out his last name, syllable by syllable, as if the consonants taste like sour grapes. Bottles of wine on his desk obscure his face while he's speaking to the camera. And his programs can last anywhere from 20 minutes to a whopping three quarters of an hour.

'Wine Library TV'

NOTHING TO WHINE ABOUT: 'Wine Library' TV host Gary Vaynerchuk is one of many who found a home for his show online.

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Yet Mr. Vaynerchuk's web program is increasingly typical of what's becoming available online. The wine merchant's rants and raves aren't edgy or offensive, which is sometimes true of stuff that runs on YouTube. They sound more like he's promoting a wrestling match. At the same time, no one would confuse it for an episode of "Lost."

Online, this "middle ground" is a growing category, said Sam Cannon, group creative director at Omnicom Group's Organic. "It's not unsafe. It's not dangerous. But it's not ready for prime-time, necessarily. The production quality of the content is just not as much of a concern for viewers, and therefore it really shouldn't be as much of a concern for us."

Who would have suspected that big marketers would be happy to advertise in programming that wouldn't seem out of place on the local public-access cable channel?

"All the pizzazz, the cameras, the lighting and the miking, I think for lack of a better word, it's a lot of bull crap in the social-media world," said Mr. Vaynerchuk, a 32-year-old entrepreneur based in Springfield, N.J. "When people are consuming information online, there is definitely a charisma and a charm to the bare-bones approach," he added. He estimates his show brings in 85,000 unique viewers per episode, mostly through streaming via iTunes, Hulu and Viddler.

New partners
On Hulu, the NBC Universal and News Corp. website that runs the show, pre-roll and display ads from PNC Bank and Pinnacle Foods Group's Hungry Man frozen dinners were spotted accompanying various episodes. The theory starting to emerge is that more advertisers will find themselves associating with characters such as Mr. Vaynerchuk, even though their shows look little like ABC's "Grey's Anatomy" or NBC's "Heroes."

"I think this is going to be an interesting chunk of audience that is passionate" and worth advertisers' time, said Andy Forrsell, senior VP-content and distribution at Hulu, who nonetheless doesn't expect these types of programs to outweigh the TV shows and movies that make up the majority of Hulu's offerings. "Does Gary have slightly lesser production values? Absolutely," he said, but "these are people that pay a lot of money" for high-quality wine, and "this is an audience that people want to get to."

Advertisers are expected to spend about $505 million on online-video advertising in 2008, according to eMarketer, a 55.9% jump from the $324 million they spent in 2007. But there are only so many TV programs that can be repurposed.

The no-frills productions come as more content on mainstream TV is taking on a stripped-down look. Reality programs and game shows such as ABC's "Extreme Makeover" certainly don't have to look like "24." As web surfers become more familiar with content generated by the average joe, TV watchers are following suit. Witness the amount of time Time Warner's CNN has begun to devote to "iReports" created by viewers. Even mainstream media outlets are producing material that lacks many of the bells and whistles to which TV viewers have become accustomed. Take "Squeegees," a humorous web series created for ABC.com. This skein of skits about young window-washers was decidedly lowbrow, but each episode only lasted four to six minutes.

Quality information
More is on the way. On Networks, a distributor of digital entertainment, this month intends to launch "Smart Girls at the Party," an interview show with high production values that features comedic actress Amy Poehler, best known for her work on "Saturday Night Live." Digital programming may not always look as polished as a TV drama or comedy, said Jen Grogono, head of programming for the Austin, Texas, company, but it can make up for that with editing and offering lots of information.

Of course, these are still early days for web-based entertainment. Should audience numbers grow and media companies find better ways to make money off digital content, marketing executives say the programs will look a lot nicer. "I think you're going to see users hunger for better quality," said Paul Leys, director of West Coast innovations at Interpublic Group of Cos.' Initiative. The industry is "still kind of new in this space."
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