Archive for November, 2007

Pre Roll and TV pricing

Posted in Uncategorized on November 21, 2007 by southborough

TRADITIONAL BROADCAST BUYERS CONTINUE TO express concern that pre-roll inventory is overpriced, particularly when compared to television. This perception impacts the online video market by slowing adoption and reducing budget allocations. However, the facts suggest that pre-roll inventory is accurately priced and much of the perception is based on an apples to oranges impression comparison, or what I call the M&M Problem.

While the dynamics of supply and demand exist in all online ad markets, most categories are demand-driven because of enormous amounts of inventory oversupply. However, pre-roll video is different. On the demand side, pre-roll video is rapidly emerging as the single most desired and highest performing online branded ad unit on the Internet. On the supply side, publishers have been slow to integrate pre-roll and to drive traffic to their video sections, and high quality inventory continues to be fundamentally limited.

Pre-roll demand is primarily driven by the strong general interest in video and the units specific strengths with regards to high volume distribution, guaranteed impression capabilities and burgeoning publisher support. Further increasing demand is the fact that pre-roll is outperforming other video units on most performance metrics. For clients targeting commercial views, pre-roll is by far the best value on a cost-per-view basis. In fact, in-banner video is often 10 times or more expensive on a cost-per-view basis, unless of course it is auto-played which comprises the comparison. For clients targeting clicks, pre-roll delivers five to 20 times the click-through rate of comparable banner or sponsorship units. Lastly, multiple studies of online video have further demonstrated that pre-roll scores strongly in measurements of brand recall and brand lift.

On the supply side, high quality pre-roll video inventory is fundamentally limited. Publishers are getting much more savvy in regards to highlighting video content and driving traffic to the video section of their site, but it is simply not driving enough impressions. Lower tier or high volume user-generated publishers are trying to repackage their inventory in hopes it will be perceived as high quality, but the market is simply not valuing this inventory in the same way. The supply problem will likely be solved, but it will take time.

So, is pre-roll inventory cheap or expensive at its current price? Supply and demand would suggest it is correctly priced but it is more interesting to consider pre-roll pricing on a relative basis, such as compared to television. Here is where disconnect occurs. The standard argument would suggest that prime-time television inventory is priced around a $15 CPM and high quality pre-roll inventory is priced at around a $30 CPM, so online is clearly overpriced. However, the “M” in the CPMs of television and pre-roll are fundamentally different, thus creating the M&M problem.

First, television impressions are based on overall viewing statistics — but a significant percentage of viewers skip the ads, are out of the room or simply don’t watch them. Pre-roll impressions are user-initiated, so the actual view-per-impression ratio is much higher. Second, online video impressions include companion banners that stay on the page during the play of the subsequent video. This additional impression is not counted as an impression in the pre-roll CPM calculation and, if so, would decrease the CPM price of pre-roll. Lastly, online video ads are delivered to active viewers who are awaiting a piece of content that they personally selected. No study has quantified the difference, but the value of this impression is clearly higher than a passive viewer.

When pre-roll CPMs are adjusted to address the M&M problem, pre-roll and television pricing appear comparable. These facts, along with the high performance metrics of pre-roll and increased support from publishers, suggest that the pre-roll unit is going to continue to gain traction. In fact, I predict advertiser demand will grow faster than inventory supply in some categories and we will find pockets of pre-roll inventory that actually go up in price significantly over the next twelve months. If that happens, pre-roll pricing may end up being overpriced after all.



Posted in Uncategorized on November 21, 2007 by southborough
New ‘Indie’ Entertainment Site Strives To Create Niche
A SITE THAT COMBINES E-COMMERCE, social networking, and word-of-mouth lead-generation launched to the general public on Tuesday. currently sells music CDs and movie DVDs, and soon plans to offer video games, digital downloads and books.

But in addition to offering those products, Fanista also promotes what a number of leading social networks, including Facebook and MySpace, are now trying to achieve: A community of consumers who base their relationships on similar buying habits.

What makes Fanista unique is its focused growth strategy. Members are offered financial incentives for recruiting other members.

Through its “Common Interest Commerce” rewards program, Fanista members can earn up to 10% commission of their friends’ purchases, along with insider perks and a form of “social status” for establishing themselves as tastemakers and experts when they share their opinions with the community.

“It’s an intriguing combo, and it sounds like an interesting word-of-mouth play,” says Pete Blackshaw, executive vice president of Nielsen Online Strategic Services.

You’ll see more of these models going forward, and some of them will inevitably be shrouded in controversy,” Blackshaw added. “The trust factor is definitely at stake here,” he says.

Fanista CEO Dan Adler, an entertainment industry veteran, believes the site will fill a niche.

“We’re like those great old indie record or video stores where you could talk to a real person with a depth of knowledge and an ability to share their passion in very personal terms,” Adler says. “We all crave someone to help us navigate an information-overloaded world.”

Adler’s efforts are being backed by Alticor, the owner of the multi-level-marketing company Amway, which has invested millions of dollars in the new site.

“It’s definitely the old Amway model,” says Gartner analyst Andrew Frank. “There’s bound to be a mixed reaction because many people want to have their relationships to be free of commercial interests.”

Adler previously served as head of Creative Artists Agency’s New Media division during the boom. He also served as vice president of creative development for Walt Disney Imagineering.

Yahoo and Sony BMG

Posted in Uncategorized on November 21, 2007 by southborough

YAHOO HAS SIGNED A BROAD new licensing agreement with Sony BMG that allows consumers to add music and video content from the label and its artists to user-generated creations.

The deal expands the catalog of music videos on Yahoo Music from Sony BMG, whose artists include Alicia Keys, Daughtry, Bruce Springsteen and Jennifer Lopez. It also allows the distribution of videos through a media player that users can access on other Yahoo properties and embed on third-party sites.

Terms of the deal were not disclosed, but they include a revenue-sharing agreement between Yahoo and Sony BMG on video advertising.

The agreement marks the first time Yahoo has licensed content from a major record label in connection with user-generated videos. Sony BMG signed a similar licensing deal with Google last year, and struck another last month with social networking site MySpace.

Under that deal, Sony will license music videos, select audio material and other content from its artist roster, and will make the content available on its artists’ MySpace profile pages. The moves reflect a growing willingness by music companies to make their assets available online with fewer restrictions.

A new report released by JupiterResearch on Tuesday says that while digital sales will make up one-third of the music market by 2012, the growth online won’t offset the drop in CD sales.

Piracy has been a chief concern of record labels and other traditional media companies heading online. Last month, a group of major media and Internet companies including Disney, NBC Universal, MySpace and Veto announced a set of guidelines calling for the use of filtering technologies and other steps to block the unauthorized use of copyrighted material in user-generated content online.

Yahoo is not part of the coalition, but plans to introduce its own monitoring and filtering system for unauthorized content next year.

Facebook & Privacy

Posted in Uncategorized on November 8, 2007 by southborough

As industry executives convened in Washington, D.C. last week to debate whether behavioral targeting techniques violate privacy, Facebook was prepping a new initiative that makes anxieties about serving people ads based on their surfing history appear almost quaint.

Facebook Tuesday unveiled a sweeping new program that allows marketers to conscript members to serve as brand advocates.

Under the program, members can sign up as fans of particular brands. Those brands can then send ads to members’ Facebook friends that include the fans’ name and photo.

While this scheme doesn’t necessarily implicate privacy concerns, it’s troubling for other reasons. First, people can sign up as “fans,” but that doesn’t necessarily mean they actually like the brand. People identify themselves as supporters of all sorts of things online for a variety of reasons — including simple curiosity about what perks and/or access doing so would bring.

Secondly, it’s not clear that members who become brand fans realize that they are going to be harnessed as brand advocates. Yes, consumers are walking ads for many products; when people wear a Nike T-shirt or walk down the street drinking an Evian, they’re arguably advertising for those brands. But those people certainly realize that they’re walking around with branded logos and the like. On Facebook, they may or may not appreciate that signing up as a fan means their likeness is going to be used in ads.

Another part of Faceboook’s plan, the Beacon program, is far more troubling from a privacy point of view. That initiative involves informing people’s friends of purchases they’ve made online. In other words, if one Facebook member buys a DVD of, say, season two of “The Office,” and allows that information to be shared with others, the member’s Facebook friends will be notified that one of their contacts has purchased that DVD.

Users will be able to opt out of the service, but privacy concerns remain. Simply explaining this type of offering to people who aren’t familiar with Web advertising might prove difficult, let alone explaining the opt-out procedure. What’s more, even tech-savvy users mistakenly check the wrong boxes online, inadvertently opting in instead of out and vice versa. Additionally, as GigaOm points out, even if people opt out of having their purchase information shared with other members, Facebook might still harness that information for other marketing purposes.

Apart from privacy concerns, it’s not clear that Facebook users will tolerate this degree of commercialization. It’s one thing for people to talk up a movie, book or particular store to each other. But simply spreading the fact that users have, say, purchased a book, without including whether those people liked it, or even read it, is all but meaningless.

15% of all Radio listened to from a digital platform

Posted in Uncategorized on November 7, 2007 by southborough

Issued: October 25 2007

  • 44.9 million adults listen to UK radio stations each week
  • 15% of listening now via a digital platform
  • Radio listening via mobile phone shows steady growth
  • Listening to podcasts via mp3 player up again

Radio listening has remained stable year on year and currently stands at 89% of the UK population*, or 44.9 million listeners for Quarter 3, 2007, it was revealed today (October 25, 2007) when UK radio audience quarterly data was released by RAJAR (Radio Joint Audience Research Ltd). However, the number of adults (aged 15+) tuning in has decreased slightly, down 760,000 quarter on quarter from 45.6 million in Quarter 2, 2007.

Radio listening via platform (analogue and digital): announced for the second time since the introduction of new methodology in January 2007, reveals 15% of all radio listening is now via a digital platform, up from 12.8% in Q2, 2007. 8.6% of all radio listening is via DAB (vs.7% in Q2, 2007), 3% via DTV (vs. 2.6% in Q2, 2007) and 1.6% via the Internet (vs.1.5% in Q2, 2007).

Digital listening hours for Q3, 2007 are up 13% to 153 million hours per week (vs. 136 hours for Q2, 2007). Listening to digital only services (radio stations which are only available on a digital platform, such as BBC7 or The Hits) continues to grow too, up from 4.8 million listeners in Q3, 2006 to 6.2 million in Q3, 2007.

Radio listening via mobile phone: RAJAR data for radio listening via mobile phone, also announced today, shows that the number of adults (aged 15+) who claim to have listened to the radio via a mobile phone continues to rise steadily. Year on year it has increased by 29% (7.1% in Q3, 2006, vs. 9.2% in Q3,2007) and five-fold since RAJAR first started to monitor radio listening via mobile phone in Q3, 2002. In addition, 23% of 15 to 24-year-olds say they have listened to the radio in this way, a rise of 21% year on year. (18.6% in Q3, 2006 vs 22.5% in Q3, 2007).

Listening to podcasts via an mp3 player: RAJAR research into listening to radio programme podcasts via an mp3 player has also seen a significant increase. 2.8 million adults (18.6% of mp3 player owners) now report they have used their mp3 player to listen to podcasts. This is a rise from 1.97 million in Q3,2006.

Detailed data and individual radio station data, for both BBC and Commercial Radio stations, is available on the RAJAR web site at

* This weekly reach figure is the number of people (adults 15+) in the UK who listened to a radio station for at least five minutes in the course of an average week during the quarter.


For further information please contact:

Penelope James, Penelope James Public Relations

Tel: 01303 844555 Mobile: 07860 162 231 E-mail:

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Posted in Uncategorized on November 7, 2007 by southborough

Rhythm New Media CEO Ujjal Kohli was in a bold mood when I spoke with him recently about a new rollout of mobile video in the U.K. “I am going after TV budgets,” he told me. Many years ago, I recall sitting in iVillage CEO Doug McCormick’s office being told the exact same thing. He made the case for the Web’s superiority over TV in targeting, day-parts, etc. and I recall raising an eyebrow at his audacity in hoping to steal money from network and cable as early as 2000.

Now I know a little better, and the staggering embrace of online video, our sheer hunger for video content of all kinds, has shaken some of my early doubts about mobile video. The idea that there will be certain kinds of news, information and entertainment content in video form that people will want to access on a cell phone is now in the realm of imagination. I don’t do it yet myself, and I don’t know anyone else who does, but now I see a likely path to mobile video viewing becoming habitual. And at the same time, it is clear that mobile viewing will rob some mindshare from both TV and online. I don’t know if it is time yet to walk into a brand manager’s office and carve out a piece of the prime-time budget, but at some point in five or six years we may see mobile at that same point online video is now — nibbling at TV.

Kohli makes one of the first cogent arguments I have heard for media buyers to make this shift. First mobile allows for sharper targeting even than online video. Six months into a program of serving ads into video on the U.K. 3 network, Rhythm says it can determine a recipient’s age, gender and whether they have seen the ad before in real time, so that the network can dynamically serve the right spot into the pre-roll slot.

Frequency capping is another strength of mobile, he argues, because TV buys tend to carpet-bomb viewers for effectiveness, and as mobile presents a total share of voice in an uncluttered environment where people are actively looking for video. And of course, there is no DVR-effect on mobile. You can’t fast-forward past an ad, and unlike the Web, there is no room to do what I usually do during pre-rolls, click away to another open window or do an email check until the pitch is over. Kohli says that as a result of all these advantages over TV and even the Web,  “our CPMs average five times television and more than two and a half times the Internet, and with a much smaller screen.”

On the 3 network, Rhythm has already run campaigns for Axe, Microsoft, Cisco and Mazda.

Of course, without scale, none of the arguments for the superiority of mobile video advertising matter much at all. With so few users willing to pay for video services that a lot of them forget to use it anyway, the only way this medium works is if something gooses user adoption.

Frankly, there is only one way mobile video achieves scale: going free. Let the carriers fiddle with their bundling schemes all they want, whether it is aggregating their own little walled garden of select clips (VCast) or pay-per-channel silliness I see in Sprint TV ($4.95 a month for Maxim TV — please!). This medium needs to be free, and Rhythm’s 3 launch shows why. This is nice-to-have content, not must-have content. More to the point, the two major video models that preceded mobile, TV and Web video, are free to use. In some people’s minds cable TV is a matter of content bundling along the same lines as a VCast or MobiTV, but I beg to differ. Most consumers are not buying content bundles in their minds. They are buying access, and that is the way mobile has to go. I may pay something extra each month for data access generally, but paying specifically for video on mobile is a recipe for keeping the platform in the same early adopter niche video-on-demand occupied for years, before free and ad-supported models opened it up for people to try.

The most encouraging news from Rhythm’s six-month run is the importance of free. The mobile video is a completely no-cost, ad-supported set of video clips. In fact, the system even picks up the tab for data charges. Rhythm is both serving the ads and aggregating the content for the carrier. The effect of a free service with ads has been impressive. According to Kohli, of the 4 million subscribers to the carrier, 1 million are registered for the video service.  

I have not seen the 3/Rhythm programming, so I can’t attest to its quality, whether it is at all compelling. Nor can I say anything about the frequency or regularity with which those 1 million registered users actually access the service. As I have said here before, I am still skeptical about early mobile numbers, because I remember hearing in 1999 metrics like 30% of users had “accessed rich media.” Grabbing 25% of the available audience in six months is impressive nonetheless, and it bespeaks the power of an ad-supported, genuinely free model to get people to see whether a new platform fits into their lives.

Everything else is just noise. Yes, mobile is a bit different from the Web, in that it has a built-in micropayment system for easy charging, and there are real incremental costs for carriers who stream video. Tough. Carriers should stop whining about their special circumstances. If they want to be media companies, then start acting like the media I as a consumer am used to getting. Trying to squeeze monthly fees for channels or from video-specific bundles on mobile is no different from the years of CNN trying in vain to charge for Pipeline and keeping its premium columnists behind the TimesSelect wall.

Give it up. Knock it off. Make video a standard pact of a data package and start building ad-supported models around it. Consumers, publishers and media buyers need a consistent, singular model. Give it a few years and then maybe we can walk into that brand manager’s office and make the final argument, the killer argument, the one that Web video is starting to make credibly: this is where the eyeballs have moved.    


Posted in Uncategorized on November 6, 2007 by southborough

AMIDST THE BIT TORRENTS OF digital plankton prognosticating the failure of the newly launched News Corp./NBC joint venture Hulu before the online video platform is even readily available, one can’t help but wonder if there isn’t something more significant here that we as an industry need to take note of: Old-media defenders can actually become new-media players once they wake up to the reality that liberating their content can actually, well — liberate them.

To begin with, the platform is simple and refined. From a digital branding perspective, it’s a little on the sparse side, but the GUI (graphical user interface) is at once elegant, clean and open.

Lots of free content abounds – even new prime-time episodes. But what’s perhaps most impressive is the “create, customize, share” tools that will enable consumers to edit custom clips from hit shows and instantly forward them to a friend. Add some Brew applications to the platform and imagine, we’ll be forwarding clips to phones.

Just think of the opportunities. You edit your favorite clip of the best of “Bionic Woman” or “Last Comic Standing,” and click: ready-made responses to the most offensive emails in your i-box. Not to mention the myriad of Idol Worshipers that will be set free if Freemantle finds Hulu worthy of Sir Simon and his Band of Merry Men.

From an agency creative perspective, one can’t help thinking about the unique opportunities to draft off of these edited viral clips — but not with your standard pre-rolls. If you stop to think about the opportunities to dynamically link program clips with product features or benefits, or brand attributes with character attributes – the contextual possibilities begin to seem endless. The question in my mind is, will NBC/Universal be a bit more patient than News Corp. was after its MySpace purchase, instantly overloading the platform with ad units and driving viewers away within months?

I hope Hulu succeeds. Not because Big Media needs a win. But because it takes courage to look at the marketplace with fresh eyes and not just accept the consumer requisites that go with today’s free on-demand territory, but add value to those diminishing margin requisites in a manner that moves the whole user experience forward. Legally.

The hefty margins that ended up marginalizing the record business because they were too late to liberate their own content by their own free will may not replicate themselves in the television business just yet. Pure-play online platforms might have the market cap for now, but there is something to be said for having multiple distribution platforms in place to bundle together that leaves Big Media strategic partnerships like this one in a place to succeed.

As for the advertisers, time will soon tell if platforms like Hulu actually become the kind of quality environment that advertisers prefer to find themselves in – rather than having to dumb down their brand equity to feel at home in places like Google and YouTube.

From this creative’s perspective, Hulu is quite simply off to a very clean start.