Online TV show ads in peril?

A few weeks back I asked you for evidence of whether online advertising was showing signs of growing or shrinking. I got some feedback, but none of a smoking gun. Then I spent a few sick days watching a lot of Hulu on my TV screen. I mean, a lot. (I even took a brief look at that Heroes movie with Henry Winkler and Sally Fields that keeps showing up in my recommendations queue for obvious reasons. Talk about a very obvious database-matching exercise gone awry.)

If you haven’t watched Hulu lately, check it out. Are you seeing as many PSAs as I am? I didn’t know the Air Force had so many ads to show. And I didn’t know there were that many eco-friendly organizations as I’ve met lately on Hulu.

I’m even talking about top shows like The Office or House. Is it possible they aren’t selling out their inventory on these great shows? Gratefully, I was spared the flood of PSAs once I started catching up on Battlestar Galactica (BSG). Sponsored by DirecTV, BSG affords a perfect example of online video advertising done right. Yes, DirecTV sponsors the whole show, but each ad is different. Featuring John Michael Higgins in the fictional board room of a generic cable company in panic, these ads deliver. They’re so funny they actually make me wish that satellite TV wasn’t headed for the sidelines.

But brilliant touches like these are few and far between. Again, I’m asking you: is online TV advertising in danger of failing to support this fledging new medium upon which so many millions of us have become dependent?

4 Responses to Online TV show ads in peril?

  1. I think it’s partly a structural issue of the way online TV ads are sold–usually as add-ons to offline buys. Viacom’s earning call yesterday acknowledges that this is an issue:

    “Chairman Sumner Redstone and CEO Phillippe Dauman talked about the challenges Viacom (NYSE: VIA) faces, saying the first quarter this year will likely be grimmer than the fourth quarter of 2008, and that the ad environment “will get worse before it gets better.” Specifically:

    —Digital revenues are growing, but remain incremental to those of other units. Dauman said that while traffic on Viacom’s sites remains strong (46 million unique visitors in the U.S. and 90 million worldwide) the company isn’t ready to separate out those results because digital ads are primarily sold as an add-on to traditional ads rather than separately. In addition, Dauman said that the company will “align” its traditional network programming with its digital programming. Translation: the economy is too weak to support original programming online; web programming will consist primarily of network programming extended online. Dauman said the company was successfully selling digital advertising across multiple platforms like mobile and IPTV, but he didn’t offer specifics.” (summary courtesy of

    Hulu provides a compelling product for advertisers but media buyers are just not ready to commit in large numbers, especially in this economy.

  2. James McQuivey says:

    Sarah adds some significant evidence for something I have been wondering about. Thanks. It’s the fact that online TV ads are just an add-on to TV buys that helps explain why most online video advertising does not impress. No one is taking the time to really craft the right ad message — having multiple ads that tell a story over a single sponsored episode, for example. That confirms my fear that ad execs aren’t using the recession to sharpen their ad strategy — they’re just cutting back across the board. Bummer.

  3. George Bear says:

    You hit one nail on the head – no one is bothering to craft ads for online use.

    There is another big nail needing a bigger hit. The viewer experience on a PC is radically different to TV – even ignoring ad zapping, channel shifting. And it is not simply a matter of how easy it is to get distracted or ignore ads online. In front of a TV one switches off the mind – with a PC, you switch the mind on. Until you can hold attention online, ads wont have a high value.

  4. some media planner says:

    the problem with hulu is they don’t let me, as an advertiser, purchase effectively. if i want to run an ad for my local banking client, why can’t just have it shown to ip addresses within my defined geographic area or at least a defined dma? what if i’m targeting a particular age group, hulu won’t let me segment via particular shows. hulu is leaving so much ad money on the table because they haven’t realized that ad buyers, like web tv viewers, want to be able to access our ‘content’ (audiences) in an on-demand nature. the tech is there, i can target my google campaigns in 100 different ways, they just don’t want to adopt it and want to force me to buy ads the way they want me to. i hope they figure it out quickly enough because i love the service as a consumer and love the vehicle as an ad buyer.

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