Upfront 07

Broadcast Viewers Follow Shows Online

Network Sites Support Dizzying Array of Material and Lure Blue-Chip Advertisers, Giving Buyers a Lot to Talk About

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NEW YORK (AdAge.com) -- It's not YouTube or "you lose" quite yet for the broadcast networks. Their websites are gaining as crucial tools in the 2007 upfront market as viewers spend more time with their favorite shows.
NBC.com will launch social networking services into its website this June.
NBC.com will launch social networking services into its website this June.

That means the networks' websites are also marquee venues for advertisers in the rush to place ads in front of online video streams. Networks are eager to capture the growth in online video ad revenue; eMarketer predicts such ad spending will rise 89% this year to $775 million.

The networks' websites have evolved from little more than promotional venues with scheduling information on shows to web destinations for watching full-length episodes of the networks' top prime-time programs.

ABC.com last year featured four shows and 10 advertisers such as Procter & Gamble Co., Ford Motor Co. and AT&T. ABC sells ads for its website's video player, not by specific show. Early data found that ad recall was as high as 87%. NBC has reported that 81% of viewers recall the pre-roll ads on its streaming episodes after two or more exposures.

Video player upgrades
Last month, ABC upgraded the video player on its site with enhancements including additional sizing options. Other networks are following suit with pre-upfront nips and tucks. CBS.com introduced an online spinoff of "The Ghost Whisperer," while NBC.com recently launched social-networking tools on its site.

Merrill Lynch & Co. recently predicted that 5% of upfront dollars would go to digital this year, an increase from 2% to 3% in 2006.

"Network websites will claim a stronger portion of [ad dollars] than in years past," says Vivi Zigler, exec VP-digital entertainment and new media at NBC.

Media buyers are intrigued. "We have to look at all the options available to us that will make our media plans more effective for our clients," says Ed Gentner, senior VP-group director at MediaVest USA, New York.

'Good place to experiment'
Magna Global will also be paying attention to networks' online destinations in this upfront, especially since Johnson & Johnson has been an advertiser in ABC.com's streaming episodes from the get-go, says Larry Blasius, exec VP-director of negotiations at the Interpublic Group of Cos.-owned media agency in New York.

Source: Nielsen/NetRatings

"It's an extension of what we are doing on-air," he says. "There aren't a lot of people watching online, but having said that, it's a very good place to experiment and find out what it does and doesn't do."

Network websites are helping solve one of the big problems with advertising on network TV -- declining viewership.

"You look at prime time this year on broadcast, and there is some fairly significant erosion on broadcast, and the question is: Where are those viewers going? And some of them are going to broadband," Mr. Gentner says. "If you are looking to reach specific viewers or programs, this is a natural extension to reach those viewers."

Online viewership
Though networks don't usually disclose streaming numbers for their online episodes, ABC has said its player has logged more than 83 million total episode starts since the relaunch in September. The viewing mirrors the TV ratings, which would make "Grey's Anatomy" the most viewed.

Network-website viewership, however, is just a small fraction of the online video universe. Unique visitors on the network sites range from 5.5 million on CBS.com in March to upwards of 16 million on NBC.com, according Nielsen/Net-Ratings. Meanwhile, YouTube drew 45 million unique visitors in March and Google Video attracted 19 million. It behooves the networks not to stop with their own websites.

The YouTube threat is one of the reasons NBC Universal and Fox parent News Corp. joined forces in March to create a web service that will distribute network programming to more than 95% of the internet on sites such as AOL and MSN.
At first blush, such a venture might seem cannibalistic, with the potential to draw viewers away from the network websites broadcasters are pumping up. However, the point is to increase overall viewers for network shows.

"NBC, Fox and CBS have all done announcements to increase their distribution of streaming shows," says Tracey Scheppach, VP-video innovation director at Starcom USA, Chicago. "Part of that is driven because distribution on your network site alone doesn't maximize eyeballs. If you look at where people who are on the internet go, only a fraction goes to the network website ... but programmers believe there is a big audience beyond their own website."

Unanswered questions
New video services, such as Joost, Bebo and the NBCU/News Corp. joint venture, will rely on different user experiences, and those experiences will play a large role in determining the success, Ms. Scheppach says. "What are the layers? What is the experience around that content? How much flexibility is an AOL going to have to monetize the area around the content? A lot of this is to be worked out," she says.

Network websites also are more than just a source for streaming episodes of shows, says Todd Chanko, analyst with Jupiter Research. The network website has always been an entry point where fans of specific shows can extend and expand their relationships with those programs via message boards, contests, games, and information on cast and characters.

"Wherever their content travels, that is the whole point to the NBCU/News Corp. deal," Mr. Chanko says. "If there is advertising associated with it, NBC will still grab a piece of the online ad pie, but don't confuse the streaming of episodes with the entirety of all the features a network website offers -- online programming schedule, contests, features, message boards."

Streaming products
Still, the addition of streaming ad space to the upfront, coupled with a year's worth of data on usage and ad recall, turns that video inventory into a bona fide product, Mr. Chanko says.

Advertisers all have different needs online too, NBC's Ms. Zigler says. Some want banner ads, some streaming video, some integrated sponsorships.

"It's not seven things we offer for everyone," she says. "It's much more customized, and fans will respond to that much more."
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