Major portals are now streaming lots of advertising into their entertainment areas, with the advertising sold by both the portals and the content providers, who usually share the revenue.
MediaPost spoke with two content providers as well as Yahoo and MSN about the streaming advertising that now appears on Yahoo Broadcast and Windows Media Player.
Mondo Media, which sends eight animated shows to Yahoo and MSN, sells its own advertising, with the portals selling ads, too. Revenue is
generally, but not always, shared. Jonathon Marlow, Mondo's director of business development, says both Yahoo and MSN sell gateway ads that appear before Mondo's animations start. Mondo also sells its
own ad package that includes an in-stream ad during each show and static ads that surround the screen throughout the show. Marlow contrasts the ads, saying "portal ads are like TV and ours are like a
sponsorship. There's a different feel for the viewer."
"The portals share ad dollars with us," he says. "In most cases we share our dollars with affiliates, but not with Windows Media."
According to Marlow, Windows Media hasn't wanted to share revenue with content providers, because "they weren't convinced there was a lot of money there and thought it would be too complicated." But
that situation may change. "After the American Pie campaign, they will be more interested in it," he says. Meanwhile, Mondo shares revenue with its affiliates, "because it gives them an interest in
making the content successful," Marlow says.
AdventureTV.com, which provides outdoor adventure content to the portals, doesn't sell its own advertising.
Yahoo and MSN sell gateways that play in front of AdventureTV streams and "split the revenue with us," says John Davies, AdventureTV's president. He says there are "various levels of splits," but
50/50 is the average. But he says Yahoo pays a smaller share. "Windows Media is not as money driven as Yahoo and wants to support content providers, while Yahoo is looking at it more as a profit
center," he says. Windows Media also uses some of its own content and sells ads for it, while Yahoo doesn't play its own content, relying solely on outside providers, he says.
Nada Usina,
senior manager of entertainment and broadcast at Yahoo, says, "In most cases, Yahoo sells the ads. It varies depending on the agreement. We have hundreds of content providers and they're all
different."
Another reason Yahoo sells most of the advertising is that it has an experienced national sales force, unlike most of the content providers, she says.
MSN didn't speak with
Media. Answering questions by email, it said, "MSN manages the sale of advertising for the MSN network to assist advertisers." This comment may be true, but doesn't account for the fact that some
content providers, like Mondo, also sell their own advertising.
Determining who is selling streaming ads for portal entertainment areas and how the revenue is shared is important, because this
is a relatively new form of advertising. Thus far, it has been looked at from a technological perspective, with much written about the new kinds of streaming advertising that are being played. But
attention should also be paid to the economics: who's selling the ads and how is the revenue being split?