News Articles

Sling Media Defends Ad Strategy

Says It Pays Freight for Slingbox’s Free Browser, PC Apps 3/30/2015 8:00 AM Eastern
TakeAway

After taking heat for stitching ads into two of its free Slingbox streaming apps, Sling Media says it’s a matter of offsetting costs.

Under fire for stitching advertising to its free Web browser and standalone PC applications for video place-shifting Slingbox devices, Sling Media said the strategy is necessary to offset costs tied to ongoing engineering and technology testing requirements.

 

Sling Media started to apply advertising to its free browser-based app last October. On March 17 it began doing the same with a more-recently launched (and also free) stand-alone application for PCs and Macs that’s limited to users of the Slingbox M1, a $149 model launched last summer that Sling Media hopes will resonate with mainstream consumers.

 

Under the current method, an ad appears at the start of a Slingbox session, followed by the addition of digital banner ads that do not overlay the video itself.

 

PAID APPS REMAIN AD-FREE

 

Sling Media does not run ads on its $14.99 paid apps for iOS and Android devices, and it has no intention to do so in the future, company execs said.

 

Sling Media’s rollout of ads on its Web client didn’t cause much of a dust-up last fall, but the company took some heat after doing so on the stand-alone app for the M1 earlier this month.

 

Among those stirring the pot was Dave Zatz, an influential tech writer for the ZatzNotFunny blog, who called the ad strategy an overstep and a “startling spammy intrusion” by Sling Media on consumers who purchased their Slingboxes outright.

 

Sling Media was a bit surprised by the most recent response among a “vocal minority,” noting that Slingbox users were seemingly fine about it last fall when the company started to introduce advertising on the more widely used free Web client.

 

“We thought we had a pretty good sample size in October, when the negative feedback was very, very modest,” Mark Vena, Sling Media’s vice president of worldwide marketing, said.

 

But Sling Media is standing by its strategy, holding that the Slingbox platform must sell advertising in order to offset costs of maintaining the free apps and updating them with new features.

 

And, it argued, consumers are accustomed to seeing ads online. Plus, complexity has grown dramatically in the last decade as consumers stream video on an ever-increasing number of devices and platforms.

 

“We’re embracing how the market’s changed and how the business model has to change,” Vena said.

 

“The world has come to realize that digital ads are a way of life … if it’s free, somebody has to pay for it, somehow,” Michael Hawkey, Sling Media’s senior vice president and general manager, added. “I don’t have a monthly fee. Never have. Never will. Yet I must have ongoing, sustaining engineering work to keep the customer happy.”

 

The company also argued that its approach is designed to be as unobtrusive as possible to the viewer. “Even if you watch for three hours, we won’t intercede in that person’s session and overlay the content,” Vena said. “We will never do that.”

 

HAPPY WITH AD SALES SO FAR

 

While Sling Media experienced some blowback, it has been pleased with the performance of its new Slingbox ad business (it uses Google DoubleClick to manage digital ad campaigns). Advertisers that consistently rank among Sling Media’s top 10 include well-known brands such as Walt Disney, Verizon Communications, AT&T, Toyota, Kellogg’s, eBay, Hulu and Netflix.

 

CPMs (cost per thousand impressions) and click-through rates have been high because Slingbox users tend to use the app for much longer than they do when visiting a regular Web page, Hawkey said.

 

Sling Media won’t say how much it’s making with advertising, but its results cover “many engineers and many testers, so it’s not a small amount of money,” Hawkey said.

Want to read more stories like this?
Get our Free Newsletter Here!