After years of trial and error, Turner Broadcasting System Inc. has settled on an on-demand advertising formula that it says works for consumers, advertisers and the network.
The formula for success? A combination of five-second ad “bumpers” and 30-second commercials that, according to the company, represent a compromise between the threshold of what consumers will tolerate and an ad unit that still works for advertisers and agencies.
Eighty-five percent of viewers of Turner’s on-demand programs reportedly are not fast forwarding through the five-second and 30-second ad units that precede VOD fare from Cartoon Network, Adult Swim, Boomerang, Cable News Network, TBS and Turner Network Television on free on-demand platforms.
“That tells me we’re on the right track,” Turner vice president of digital ad sales and marketing Chris Pizurro said.
That “right track” was born out of years of experimentation with different pricing plans, commercial lengths and ad placements within programs.
“There is a host of things we’ve learned,” Pizurro said. “The ad units that we now have as our current offering are by no accident.”
Turner now offers advertisers a five-second bumper, which carries a “brought to you by” tagline, and a 30-second spot before the on-demand content, he said. There is no advertising inside the actual program. An advertiser also has the option to use up to two minutes at the end of the program.
Pizurro chose that format because it had the highest acceptance rate among consumers and still provided advertisers a beneficial reach.
With longer ads, consumers fast-forwarded or tuned out, Pizurro said. Ads inside programs were also a turnoff.
“We learned what consumers will accept and what’s a good vehicle for an ad,” he said.
“Right now, TBS, TNT, CNN and Adult Swim are completely sold out in the first and second quarter,” Pizurro said. He wouldn’t provide revenue figures, but said Turner has already matched its 2005 on-demand revenue figure with what has been sold for the first six months of 2006. (Industry insiders say the going rate for on-demand ads run between $10 and $20 per 1,000 viewers.)
Ad buys are for a minimum of four weeks, Pizurro said. “Some sponsors came in with a buy upfront for the year already,” he said.
“We have a nice steady stream of folks that are coming back and new folks coming into the space,” he added.
“The metrics we sell is 'impression time’ CPM, or cost per thousand,” he said. “We come back to them by the end of the flight, and provide them an MPEG [Moving Picture Expert Group] video with what ran and report back what were their impressions,” he said.
Turner provides a preliminary report within 30 days and a final report within 45 days.
The information combines data from reporting firms like Rentrak Corp., in the case of Comcast Corp. and Insight Communications Co., plus set-top data directly from Time Warner Cable, Pizurro said.
Turner provides advertisers data on the overall video-on-demand set-top universe numbers, total impressions and unique impressions, he said.
Most advertisers are seeking bigger bang for their buck up front. Less than half use the space at the end of the program, Pizurro said. With notable exceptions: Movie studios use the space to run trailers for theatricals or highlight movies appearing on on-demand platforms.
Warner Bros., for example, has promoted the on-demand run of Charlie and the Chocolate Factory following Cartoon Network fare. The studio could tell from set-top information who watched the trailer and then ordered the movie for $3.99 on demand. “They are fishing where the fish are,” Pizurro said.
Xerox Inc. used the last two minutes to provide information on a sweepstakes competition. Viewers were directed to a Web site to enter the competition, where they were asked how they learned of the sweepstakes: through on-demand programming or online.
“You need to inform the consumer upfront there is something at the end,” he said. “Consumers say if it’s compelling content, they will stay.”