• by April 1, 2001

The banner-advertising model may soon be voted off the island. So what’s a buyer to do? Sponsor.

When the host of Survivor offered up a tray of Doritos to contestants starving in the Australian Outback, that sponsorship paid off big time. Doritos is also one of the sponsors of the Survivor website, and in the online world, sponsorships are gaining an increasing share of total online ad revenue. According to the IAB, ad dollars spent on banners slipped from 54 percent of the total in second quarter 1999 to 46 percent in third quarter 2000. Along with interstitials and micro-sites, sponsorships are on the rise—they accounted for 28 percent in 3rd quarter 2000 and nearly doubled during the second quarter of 2000 [see “Behind the Numbers,” page 42]. Sponsorships were the first way that advertisers could get “real estate” online, and today those advertisers have increasingly been trying to better target where those sponsorships appear. The more times an online user sees Advil, for example, sponsoring ESPN Sportzone’s Injury Report, as they did in the past, the more likely they will be to think Advil when they sprain an ankle.

As with hems and hairstyles, everything comes full circle in the world of media buying, even, apparently, when you’re looking at a young medium like the web. And so it is with content sponsorship online, which some have said is a useless way to distract web users and doesn’t make a media buy worthwhile. One media buyer with a traditional ad background compares the current state of web ad sponsorships to early television, recalling Milton Berle as “Uncle Milty” hawking product to a then-not-measurable audience. But online sponsorships (especially cross-media buys) are definitely proliferating and getting more effective, making the money spent overall on this kind of expenditure well worth it.

Exactly one year ago this month, former Adsmart CEO John Federman said that his company’s strategy was “tied to” what they were doing with online sponsorships, because this type of advertising was “bringing up [their] CPM significantly network-wide.” He also said that he expected CPM rates to “continue to drop unless you find a reason—through unique beyond-the-banner kind of relationships—for an advertiser to want to spend more money.” Adsmart may have been folded into Engage, but as banner rates have clearly suffered over the past year, it seems he was right. And industry heavyweights such as Booz-Allen & Hamilton, whose recent e-marketing study on portal advertising advised marketers to “banish the banner and brandish the brand,” are recommending sponsorships over most other forms of online advertising. (The recent demise of work.com, the Dow Jones/Excite joint venture touted in the Booz report as a sponsorship success, makes clear that web sponsorship models—like all the other online business models—still have some refining to do.)

An experienced practitioner of online TV/cross-media content sponsorship is Discovery Corporation, the owner of Discovery Channel and other TV properties. The network has been doing integrated pitches for years, says Dina Roman, VP & General Sales Manager for Discoverychannel.com. Though other networks have been slower to come to the table with cross media advertising solutions, last year saw ABC and CBS Plus throwing their respective hats in with Who Wants To Be a Millionaire (notable for its Bob Iger-orchestrated deal with AT&T) and Survivor. Meanwhile, Discovery Channel’s internal studies show that 70 percent of their users surveyed said they got more from watching a Discovery program and then utilizing the companion online content, provided by the sponsorship deal, than if they had solely watched the program. Christine Toth, a senior media buyer for J. Walter Thompson, has done cross-media sponsorship deals with Discovery for Ford and other large advertisers. “The agency has tried to move beyond banners,” she says. Toth sometimes favors sponsorships because “the click-throughs on buttons and banners are not effective. We try to figure out how to bring the brand to life through different media.”

Discovery.com has created successful cross-media sponsorships because it reaches out to viewers/users via several media, and often it starts with TV. If, for example, a media buyer for Cisco purchases space on Discovery Channel’s very popular International Space Station TV show, they get a bottom third of the screen dedicated to their URL, which enhances the viewer/user experience. In fact, says Roman, Discovery won a Yahoo award for best interactive content on International Space Station. “The cool thing is,” she says, “the advertiser is able to follow the consumer [online, to Inside the Space Station at Discovery.com] once they purchase air space.” The user is then offered several different interactive games and quizzes, which are sponsored by Cisco, of course. And it’s working: According to a buyer for Space.com who got shut out, the sponsorships for the last upfront for International Space Station sold out months before the show’s December 2000 run date. When the ad placements are done this way, there’s another benefit. Says Roman, “We don’t do intrusive advertising; we choose to integrate Flash and animated interstitials, for example, and we find that by doing this, our click-throughs are 2-3 times higher than what’s average in the marketplace.”

Several elements of TV sponsorships appear to be making a comeback in the context of interactive ads, particularly the concept of “flighting,” or buying and scheduling a sponsorship to run at a certain time. A current example of this methodology is Budweiser’s deal with CBS Marketwatch for Friday “Happy Hour,” which starts at 2 p.m. with a horizontal bottle of Bud in a rich media banner pouring into a glass in a vertical skyscraper unit. The sponsorship extends across every time zone in the U.S. and internationally. If financial professionals and day traders, at whom the campaign on Marketwatch.com is targeted, needed an excuse to leave the office early on balmy spring Fridays, this is it. Flighting in the online medium, it’s becoming clear, is a viable way to marry the right message and value proposition with a fitting environment.

Because CBS Marketwatch also has 100 full time journalists who each write a separate column, there is a lot of space on the website to sponsor—creating greater odds of an advertiser’s message paying off. With the option of having a banner on the side of a page, a button on top, or a rich media window, as well as some quasi-subversive “wallpaper” branding (one page of editorial on Marketwatch.com features the Budweiser logo faintly imprinted under the text), sponsorship opportunities abound on Marketwatch.com. EVP of Sales Scot McLernon believes that the rise in online advertiser sponsorship of content shows “this media’s promise is finally coming to fruition…it’s one to one marketing at its best.”

Of course, there are other interactive ways to distract and involve the online consumer, as in the case of theglobe.com, which late in 2000 put together a sponsorship package that caught the user unaware, wowed them, and then asked them to buy something. If you were wandering around in theglobe.com’s community groups last December, you might have been surprised to hear the sound of crashing waves coming out of your speakers—as a full-screen rich media wave tossed a little boat in the air and washed over your page. It then implored you—as you were listening to exciting audio from the film—to click to buy a DVD of The Perfect Storm.

Orchestrated by theglobe.com’s sponsorship manager, Matthew Cortellesi, these virtual “intrusions” were highly interactive and brought the WB Network’s buyers an eye-catching way to sell their client’s product. “The WB came to us…they wanted something creative and unique,” he says of the Flash-layered technique that the Perfect Storm sponsorship featured, which theglobe had done only twice before. As a result, the Perfect Storm ad got “an incredibly high click-through rate, which was about 30 percent higher than industry standards” according to Cortellesi. Although the WB paid a “pretty penny” for their sponsorship campaign, they got a tremendous amount of consumer traffic driven to their site, which is what they were looking for.

The WB’s film arm, Warner Brothers Pictures, approaches online sponsorships just as carefully. Don Buckley, senior VP of interactive marketing, says he’s being “a lot tougher in the current environment. I want the best CPM I can possibly get, and I’m experimenting with rich media and Unicast Superstitials [in his buys]. I’m also getting great results from email.” This means that Buckley made the studio’s interactive deals pretty versatile and has attempted to do whatever kind of sponsorship buy it takes to make Warner Bros.’ brand shine online. He cites other deals surrounding the release of The Perfect Storm and related products like the Warner Bros. huge sponsorship buy on AOL, of which Buckley says “you couldn’t go on AOL without seeing branding for The Perfect Storm [and Warner Bros.].”

Where publishing is concerned, integrated sales and dot-com editorial staffs are starting to buckle down together to hash out sponsorships packages for prospective advertisers. This is an example of smart staff convergence, if it’s true that print has always taken audience (read: circulation) into account, where the web hasn’t. If online editorial sponsorships are to work, the web needs to follow this example. The recent acquisition of About Inc. Web (About.com) by Primedia presents a prime example of how advertisers are increasingly trying to leverage their brands across different media. To this end, they’ve created the Primedia Integrated Sales and Marketing Group (PRISM), which will handle all cross-platform sales and marketing efforts. The company has said it plans to create sponsorship packages that combine Primedia’s print, video, sampling, custom publishing, event business with more than 1,000-plus Internet site opportunities, which come from their About buyout.

Indeed, there are plenty of cross media options to be had: a sample buy could involve sponsorship of About’s Parenting/Family Channel, which is selling American Baby products. Incidentally, this is Primedia’s first official foray into offering cross-media advertising. “Primedia is focused on driving growth across the company by effectively integrating our assets in print, broadcast, and the Internet,” said Primedia chairman and chief executive officer Tom Rogers. “The creation of our Integrated Sales & Marketing Group will enable us to more effectively capitalize on the depth and breadth of our products.”

While selling products on editorial sites as part of a sponsorship deal isn’t new, trying to give a popular magazine’s online masses more ways to get to their favorite brands is something of an evolution. Emap USA’s Teenmag.com, for one, says Media Metrix, had 200,000 unique visitors in January 2001. And with the August 2001 scheduled relaunch of the print magazine, which will be showcasing more URLs in its stories, the number of online uniques should increase dramatically.

The Emap USA editorial/marketing duo of Audrey Fine and Maeve Cunningham is trying to remake Teen magazine online, mostly by creating a snappier web presence with targeted ad sponsorship opportunities to accompany the print relaunch. Audrey Fine, who is editor-in-chief of Teenmag.com, is excited by the reemerging presence of integrated content sponsorships for the teen market. “We are trying to build a site with sponsorable sections in mind. Going forward, we’re concentrating on bringing in the bucks with these sponsorships as, clearly, banner ads don’t work.” Fine, like Roman, stresses the need to target sponsored content. Teenmag’s ad space used to be served and sold exclusively by Doubleclick, which Fine says was a disaster because the latter ended up serving banner ads for life insurance policies—something no kid would ever click on.

So what approach are Fine and Cunningham currently using? Creating site sections, like Teenmag.com’s “Totally Tubular,” that are already 90 percent driven by content from a particular company, the WB Network for instance, which the demographic requires…and then upselling portions of the ad space available there to same. You can imagine the Dawson’s Creek-athon, and the potential ROI for the WB if Teenmag.com brings thousands of screaming teens to the network’s on-air and online brands. Currently, says Fine, Cunningham is going out on calls to studios, networks, and individual advertisers.

Other emerging sponsorships are WAP-oriented. The most recent development in this vein seems to be the time-sensitive coupon, which is upsold to advertisers looking to unload “perishable” products to hungry consumers. “Couponing” might interest an entertainment advertiser who wants to sell last minute tickets to a show or concert, a music label who is trying to promote a new act’s CD, last season’s hip clothes for kids from a design company holding a sale, and so on. Planethopper, a wireless firm that specializes in delivering advertiser’s coupon-oriented text messages to PDA network subscribers and cell phones, first tried its product out by offering coupons to opt-in consumers at General Cinemas movie theaters. From their on-site advertising, Planethopper says it got about 20,000 people to sign up for its service.

Finally, embedded email sponsorships, such as Qualcomm’s Eudora “Sponsored Mode” email program, continue to grow and gain a following. Says Eudora rep Valerie Enes, “[The software] provides media buyers measurable frequency and unprecedented message duration [as well as] targeted advertising.” Here, each impression is said to have at least a 75-second duration while the user is in the email program, and the 2x2 box is outside of the user interface in the bottom left corner of the screen, making sponsored ads unobtrusive but omnipresent.

Released in September 2000, the Eudora 5.0 software, which is available free at their website, has over a million users and has sponsorship deals with companies like Acura, Colgate, Sprint, Sony, and Excite. One satisfied customer is Net2Phone, which provides voice-enhanced Internet communications services. Based on the number of customers acquired through the service, the media plan with Eudora has been successful, said Net2Phone’s vice president of business development Yonah Lloyd, because the environment is very sticky.