NBC has a history of selling the most expensive ad spots on TV, and now the peacock network is getting the same reputation in cyberspace.
In recent weeks, NBC has begun pitching what are believed to be the most aggressively priced online ad packages offered to date.
Charter rates for NBC's online deals start at $350,000 for a six-month commitment and rise to $500,000 for a one-year deal.
That's a considerably higher out-of-pocket cost than any other commercially marketed online sponsorship opportunity. These packages are separate from the $225,000, six-week deal Microsoft Corp. recently signed as title sponsor of the National Football League-NBC Sports Super Bowl Web site (AA, Dec. 18).
According to a recent Advertising Age survey of online ad costs, InfoSeek was the highest priced sponsorship package at $40,000 per month. The second most expensive online site was $37,500 per month for ESPNet . On a monthly basis, the NBC packages would range from $42,000 to $58,000.
"It's much more expensive than anything else I've seen," said Helen Tocheff, senior VP-manager of national broadcast of Zenith Media, New York, which is evaluating the NBC online packages for clients like Toyota Motor Sales USA and its Lexus division.
Ms. Tocheff questioned the cost, but noted that NBC really is selling a charter relationship that goes beyond a Web site, or a commercial online service.
"It is being positioned more as a partnership than a straight media buy," added Betsy Frank, exec VP-director of strategic media resources at Zenith.
The packages do include ample presence, billboards and content development on NBC's two online outlets--NBC httv on the World Wide Web and its NBC SuperNet domain on Microsoft Network--but they also include ancillary NBC marketing and promotion tie-ins as well as a promise of continuing the charter partnership into new interactive platforms yet to be developed.
The six charter advertisers will have first refusal rights to renew their interactive sponsorships with NBC.
To date, ABC, CBS and Fox have used their online services only as value-added opportunities for their regular TV advertisers. NBC is the first broadcaster to offer its services as a stand-alone media buy.
NBC offered a longer-term glimpse of its interactive marketing future at a recent briefing to the American Association of Advertising Agencies' New Technologies Committee. The topic was the network's partnership with Intel Corp. on its Intercast technology.
Intercasting enables telecasters and their advertisers to transmit additional information over the TV signal that can be converted into multimedia content on PCs.
NBC believes the technology will be a boon to interactive advertising and pitched the concept to about 25 agency media executives.
"It was a very positive presentation," said Norman Lehoullier, co-director of Grey Interactive and chairman of the Four A's committee. "They pitched it as an opportunity to expand the reach of online advertising beyond the Web."
Zenith's Ms. Tocheff said NBC's interactive heart is in the right place, if not its calculator: "They are offering a total package, but even so, it's still rather expensive."
In addition to the out of pocket media buying costs, Ms. Tocheff noted there are significant expenses for the sponsors in developing their online content. "In a lot of ways, this is like the early days of cable. It's very expensive, but what you're really buying is an opportunity to get in on a ground floor and establish a charter rate," she said.
Copyright December 1995 Crain Communications Inc.