29 July 2008

Online TV and advertising

CBS announced the results of a survey last week that showed that making their shows available online would lead many people to watch the show on broadcast television:

Key findings of the CBS Audience Network study by Magid Media Labs include:

  • The median age of those streaming full episodes of CBS programming online is 38 years.

  • Having full episodes available online is complementary to network broadcasts in that it delivers CBS a net positive audience, with 35% of the online video-watching audience saying they are now more likely to watch CBS programming on television because they connected with the shows online.

  • On average, nearly half of CBS’s online video streaming audience is incremental, with 46% saying they only or mostly watch online. A majority of these same viewers say having the content available online is not a factor in their decision not to watch on TV, thus making their online viewing additive.

Having full episodes available online is complementary to network broadcasts in that it delivers CBS a net positive audience, with 35% of the online video-watching audience saying they are now more likely to watch CBS programming on television because they connected with the shows online.

“These findings confirm what we’ve believed all along - online viewing is complementary to broadcast viewing, so making our programming more accessible to people drives awareness, interest, and ratings both online and on-air.” [David Botkin, CBS Interactive]

It looks like the mainstream media are finally realising how best to capitalise on their content: by distributing by as many mechanisms as possible, while continuing to attach their advertising to it.

What is perhaps more interesting though, is the last paragraph in the press release about online advertising strategy.

In addition to these findings, 68 percent of respondents said that the CBS Audience Network had the “right amount” of advertising on the site. Overall, 50 percent of respondents correctly recalled the brand of an ad they saw during their viewing experience, and 18 percent of those who recalled an ad said that they were more influenced to make a purchase decision, and purchase intent was even higher (31 percent) for certain items like consumer package goods.

Augie Ray has written about how he sees this is the most important point in the whole release: people prefer online shows because there is less advertising. He has some figures about advertising time to back this up:

It’s easy to see why consumers weary of CBS’s advertising overload would express appreciation for CBS Interactive’s online ad approach. An episode of “How I Met Your Mother” runs 30 minutes on network television, of which eight minutes is advertising; over 25% of the sitcom’s 30-minute running time consists of ads. This same episode lasts just 23:50 if viewed online, which means that a mere 6% of the consumers’ time is dedicated to viewing ads.

That fact that over two-thirds of consumers find online TV’s less intrusive advertising appropriate is no surprise at all. Nor is it really a surprise that fewer ads means more attention and better recall of the brands advertised. The real surprise is why—when faced with the potential for a shrinking audience, shifts in consumer’s leisure habits, growing discontent about ad saturation, and diminished ad reach due to DVRs—networks don’t take a page from online TV’s success and decrease ad time. Fewer ads can mean more consumer attention, happier consumers, increased ratings, and just possibly improved ad rates.

His conclusion is well heard here. I definitely find watching downloaded TV a relief compared to the commercial television networks in Australia. The lack of ads is refreshing and I enjoy watching the show much more. I find myself more susceptible to the product placement advertising used by the shows I watch this way, noticing what computers the characters use, what cars they drive, and so on.

Hopefully CBS and the other television networks realise that their confirmation of this situation is an important outcome of their survey results too.