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BizReport : Advertising archives : September 14, 2006

Online TV Ads – Worth The Cost?

Local ABC affiliates and the Walt Disney Company have come to an agreement to allow local advertising to the online viewing lineup. Episodes of shows like Desperate Housewives and Lost can be watched using an ad-supported broadband player.

by Kristina Knight

According to Reuters the player will be available for download later this month. While the player won’t allow the commercials to be skipped over, is the programming worth the cost?

The biggest benefit is that ABC will only allow one ad to be sold per show. Potentially giving you a captive audience, so to speak. This summer ABC did a trial run of online programming. The prime result being that viewers recalled the online ads at twice the rate of regular commercials.

According to a study by Telephia, the mobile television audience is up 45 percent, to nearly 4 million viewers. Internet video adoption is higher, at nearly 10 million viewers.

So the cost is worth it, right?

Not necessarily. The majority of Internet TV watchers are children 12 and older. More than half of all video downloads are by children. This is not the target audience for most advertisers.

In the summer of 2005, only 5 percent of adults 18-34 had ever downloaded video. While the numbers are growing, until those target age groups begin watching more online offerings, the benefits of online advertising will not outweigh the costs.

Tags: 18-34 age group, Disney, online advertising, online television, online video

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