• by January 27, 2003

Cross-Media
Revenue Dreams
by Steve Smith, popeyesmith@comcast.net

Is the dream of cross-platform ad sales finally coming true for the mega-mega media behemoths that have invested so much managerial time, investor money, and executive ego in setting up their conglomerates? Maybe, kinda. Despite all of the recent hand-wringing about a failed synergy model, big-big media are beginning to see up to 10% of their revenues coming from these outsize deals, according to GartnerG2 research director Denise Garcia. Now that each of these media brands has a special sales group in place to broker such deals, the concept is beginning to float, at least as a trial balloon for future media spending.

Since setting up its Global Marketing Solutions Group last August, AOL Time Warner has booked a little less than 10% of its total ad revenues from 25 large deals with the likes of Toyota, H. & R. Block, Burger King, and DaimlerChrysler, Garcia found. That’s not the 20% of revenues the company had hoped to see by now, but it ain’t chump change either. GartnerG2 is projecting that “for the media conglomerates, cross-platform deals will account for 20% to 25% of total ad revenue in three to five years,” says Garcia.

Big media loves these arrangements for exactly the same reasons advertisers are starting to ask questions about them, however. Media companies can weave into the deals with major product and service brands excess inventory or smaller properties that would never get a shot at carrying these ads otherwise. “Cross-platform deals with major product and service brands give media companies the chance to spread the wealth into smaller properties that would never get a shot at carrying these ads otherwise,” says Garcia in the GartnerG2 report.

Whether cross-platform arrangements are any good for the advertiser, let alone the agency, remains an open question, but the early returns are about to come in as the first of the AOL Time Warner deals (most notably with Toyota) comes up for renewal this month. “The early data is showing us that the advertisers right now are confused and aren’t sure that they will renew,” says Garcia.

Clients are questioning the strategic wisdom of these deals. Have they purchased properties that they wouldn’t have otherwise? Another concern involves how well such cross-platform buys reach a target audience. “It’s unlikely an agency or advertiser can cover the entire target because the conglomerate doesn’t have competing media to cover a whole target,” says Garcia.

Worse, how much audience overlap is there going to be? Sure, you can buy into Time, CNN, Sports Illustrated, and all of their online brethren with a single invoice at AOL/TW, but isn’t a media company’s ability to shuttle the same audience among its many properties one of the principles of media synergy? An advertiser buying into this scheme has to ask him- or herself, How many times am I paying for the same eyeballs here? “The advertisers are becoming more skeptical, and this is where it gets interesting,” says Garcia.

And it could stay interesting for a while, because there seems to be a noticeable dearth of hard research or case studies on the effectiveness and efficiency of cross-platform approaches. But wait a sec. Haven’t Disney, Vivendi, and AOL/TW been using their multiple platforms to cross-market their own media properties for years now? Doesn’t anyone have numbers about their reach and effectiveness?

Online
Reaching the Affluents
by Masha Geller, masha@mediapost.com

What is the best way for smart marketers to reach the most influential audiences?

A new study shows that business decision makers are more heavily influenced by advertising on the Web than advertising on any other top medium. The study, which was jointly conducted by washingtonpost.com, Nielsen//NetRatings’ @plan and MORI Research, also found that increased usage of the Web by decision makers is leading directly to their decreased usage of leading traditional media.

According to the findings, 60% of business decision makers surveyed recommend the Web when asked which media to include in an advertising campaign to reach them. Less than 40% recommended using television or radio. An overwhelming 77% said that the Web is the place where they prefer to find out about new products and companies, and nearly half said that the Web has actually influenced them to make a purchase or obtain a service for their business.

Additionally, 17% use the Web at least five hours per weekday (excluding email) and 50% of those that have increased their Web usage in the last year said they have decreased their television viewing as a result.

Michael Zimbalist, Executive Director of the Online Publishers Association said, “It is noteworthy that their usage is concentrated during the daytime, while they are at work and undistracted by other media choices.

Just to put this release into perspective, an Arbitron/Edison Media Research study released last week found that 37% of those online are watching less TV as a result; 31% are spending less time reading newspapers, and 27% are spending less time reading magazines.

Also, a May 2002 comScore study revealed that the audience for major newspaper websites grew much faster over the past six months than the markets' total Internet user base in seven of the 10 largest U.S. markets. Moreover, a survey released in March 2002 from Forbes.com showed that C-level executives spend more time during the week online (exclusive of email) than they spend with any other medium.

Streaming Media
Playerless Video Makes Its Play
by Phil Leggiere, philguy@prodigy.net

“Advertisers have spent a lot of futile time and money trying to invent new ad formats for the Web,” explains David Raphael, executive vice president of corporate development at streaming media software designer EyeWonder. “But so far, rich media, with all its bells and whistles, has been more intrusive and annoying to viewers than anything else. What we’re trying to do is allow advertisers to take the greatest ad format there is, the TV commercial, and bring it seamlessly into a Web context.”

Since its founding in 1999, EyeWonder has pursued the Holy Grail of repurposed TV video for the Web for Fortune 1000 companies. With the debut this summer of its EYERIS G3 next-generation streaming video software, the company believes it has succeeded in making prime-time-TV-quality videos truly Web-friendly. Where other streaming media video solutions require consumers to download either Windows Media or Real Player video players, EYERIS enables host-initiated video loads automatically on the page without the need for download. EyeWonder’s Java-based compression software sends an applet directly to the viewer’s browser. The software can be deployed in any HTML or DHTML format, without the need for extensive coding and reformatting.

Advertisers using EYERIS G3 can also track not only who sees the video, but also how long they watch and precisely where and when they stop viewing. Unlike rigidly formatted 30-second TV ads, Web-delivered ads can also be customized and extended to run to any length desired. “If you had a great 42-second spot and had to cut 12 seconds to fit the TV schedule,” Raphael says, “there’s nothing stopping you from running the ad intact on the Web.”

Early adopters include American Express, which recently ran a series of celebrity-centered streaming videos for New York’s Tribeca Film Festival and the U.S. Open tennis tournament. This summer EyeWonder also forged a strategic alliance with Yahoo! to sell and implement EYERIS playerless technology to major Yahoo! advertisers. In collaboration with Yahoo!, Coca-Cola utilized EyeWonder technology to bring its “Youth Partnership” program television campaign to the Web.

iTV
Digital Deadline Looms
by Lee Hall, lee@deadlinemedia.net

TiVo, the personal video recorder continues to attract the disdain of TV industry executives, in part because of its ability to allow consumers to skip through the ads. Some research has shown that TiVo owners actually watch more commercials, but you wouldn’t know that by checking out the Community Forum message board (http://www.tivocommunity.com).

“The reasons for skipping ads are obvious,” writes a member sporting the handle DrStrange. “They are stupid, they rarely apply to me, and there are too many of them.” Another author, calling himself Steuert, wrote that he used to ignore all advertising “because most of it is stupid, boring, intrusive, and of no interest to me.” Steuert concedes that he now finds himself paying more attention to advertisements than he did before. “I often go back, pause, and view an ad in its entirety if it is well produced and describes something of interest.”

While PVRs like TiVo and Replay TV have hardly taken the market by storm (there are still only a few hundred thousand units out there), they remain extremely popular with their owners. Another big cable operator plans to introduce the idea to some of its customers.

Time Warner Cable recently said that it would soon offer cable set-tops with digital recording capability. The cable operator is, of course, owned by media behemoth AOL Time Warner, employer of one Jamie Kellner. The Turner Broadcasting System chairman opined last spring that people who skip over TV commercials were, in effect, stealing programming.

Being a pretty shrewd brood, advertisers have been toying with new ways to make us watch commercials. Over the summer, cable channel TNT — also owned by AOL Time Warner — experimented with Internet-style pop-up ads during a movie telecast. Contestants in the popular CBS series Survivor vied for the chance to grab a snack of chips and a soda, both of which happened to be products of show sponsors.

Ad-weary consumers may be a step ahead for the moment, but Madison Avenue is catching up.