NEW YORK (AdAge.com) -- If you build it, they will come. Problem is, CBS didn't know how many of them. The broadcaster's online screening of the first four rounds of the NCAA was arguably the most successful demonstration to date of TV on the web.
|Large numbers of online viewers were shut out of viewing or placed on waiting lists that were as long as 120,000 people.|
Millions turned out when they opened the virtual-stadium gates, and media buyers were so impressed that they are already trying to get a piece of the action for next year's March Madness Internet extravaganza. But in capping the number of simultaneous streams at 260,000 CBS actually underestimated the draw of this year's event, and thousands of viewers -- all potential ad impressions -- were left out in the cold.
Jason Siegler was one of them. The assistant professor at Brooklyn College logged in to NCAASports.com at around 1 p.m. on Thursday, March 16, hoping to catch a little March Madness action. He had registered for March Madness on Demand well in advance, but so had around 1.4 million others, and he was placed in a virtual line -- behind 120,000 other fans waiting to get in.
Mr. Siegler's experience says a lot about the trials of broadcasting potentially mass-audience events over the Internet. Fox network executives underestimated the masses that would tune in for the premier of the fourth season of "American Idol," but when 33 million viewers did, it didn't matter. But when March Madness on Demand exceeded CBS Sportsline's expectations, not everyone got to watch the game.
Bandwidth not infinite
On TV, a network's broadcasting cost is static no matter how many people are watching. On the Internet, as viewers increase so does the cost of bandwidth -- an inherent economic difference that suggests it may be more difficult than one thinks to fulfill both the consumer and advertiser demand for high-quality, big-event streaming video. Hypothetically, bandwidth online is endless. But in practice, "it's a function of the number of servers we deployed across the Internet," said Bill Wheaton, VP-digital media, Akamai, the digital-media-delivery company that handled the streaming technology for CBS Digital.
"We knew from the beginning that we would need to put a cap on it, and all the advertisers knew as well," said Scot McLernon, senior VP, CBS Digital Media. "We wanted the user to have a terrific experience."
"Now at least they have a baseline," said Michael Turcotte, media supervisor at Beyond Interactive, the interactive agency for advertiser Staples. "The overall consensus is we liked it, and I think it's only going to grow." It certainly will, as a number of media buyers have already said they want to ink deals for 2007.
Service sold out early
This time around the CBS Digital sales staff sold to TV advertisers first, stopping when they got to 15, said a person close to the deals. Other brands bought media across the Web sites only. CBS Sportsline confirmed March Madness on Demand was sold out before the tournament began.
The deals they struck weren't based on video impressions but were sponsorship deals that guaranteed a certain number of ad impressions across CBS's network of sports Web sites, including NCAASports.com, CBSSportsline.com and CSTV.com. Online advertisers reported getting two to three spots per game. Each 30-second spot was accompanied by a skyscraper and a banner ad that remained on screen as the video player streamed content.
The strategy was likely a way to reduce risk for CBS -- it would have been very difficult to give make-goods on live video impressions if CBS hadn't delivered. Still, some advertisers are hoping to use the final data to back into a cost-per-thousand total for the online video ads, hoping it will come in under the $35 average CPM for March Madness on TV. (The cost to advertisers for the online deals is impossible to calculate as most were part of cross-platform deals and it's not yet known how many streams they'll get for their investment.)
But benchmarking the online ads against TV is like comparing apples to oranges. The online-viewing environment was less cluttered, with only three commercials shown per break. And online video ads offer the attributes of accountability and interactivity that TV doesn't, experts pointed out. Typically, online, the marketer only pays for ad impressions actually seen.
"I watched the event on CBS Sportsline [and] there was a bottleneck, but they had the necessary technology to pull it off and when I got in, I saw an ad," said Matt Wasserlauf, CEO, Broadband Enterprises. Plus, he said, if you are interested in a product being advertised you can click on the skyscraper and connect to the marketer's Web site.
"On a one-for-one basis, the buyer got much more value than just having advertised on TV," Mr. Wasserlauf said. Of course the 10 million viewers who tuned into the TV broadcasts dwarfed the online version's 4 million visitors.
Can't fault CBS
It's hard to fault the network for playing it conservatively -- it was working in uncharted territory. The previous two years, March Madness on Demand had been subscription-based, which kept out the hordes of sports fans, and the quality was notoriously poor.
Additionally, CBS Digital entered the arena this year at a sort of tipping point for online video. "AOL's Live 8 [concert last summer] was the big breakthrough event that kind of jumpstarted this whole love affair we've engaged in with digital in a sight, sound and motion kind of way," said Sarah Kim Baehr, VP, media, Avenue A/ Razorfish.
And the demand for video advertising is clearly expected to increase. While the Web generally takes up about 17% of consumers' time spent with media, Internet advertising only commands about 4% of ad budgets -- and online video represents about a tenth of that, Vince Messina, Yahoo entertainment category officer, told advertisers at last week's ANA TV Advertising Forum.