For the first time, television series with the most viewers are commanding higher advertising rates at TV-viewing Web sites than they are on prime-time TV. Nielsen Co. ranks "The Simpsons" and "CSI" among the highest viewed shows online. Fox TV shows as well as content from NBC, ABC and elsewhere stream for free on Hulu and has popularized the genre of on-demand, long-format Web-based television. Marketers are agreeing to pay more for online video advertisements on sites such as TV.com and Hulu because the viewers are more proactive - they seek out these specific shows, and that translates into more reliable eyes on the screen. Per show, streamed material has less commercials than their television counterpart. This means that viewers are twice as likely to recall ads, says David Poltrack, chief research officer at CBS Corp.
For example, the April broadcast of the US collegiate basketball championship game was watched by 17.6 million fans, as Bloomberg cited today. In comparison, the March championship tournament audience was 7.52 million viewers.
Unfortunately, ad revenue lost in the past year will not be replaced by this growth. While the network television audience shrank 3.6 percent last season, Web viewing and ad sales are not large enough to make up the difference, even though both are increasing.
This growth is responsible for encouraging higher Web ad rates as compared to the same shows on television. Marketers that pay between $20 and $40 per thousand viewers for a prime-time ad on network TV are willing to pay $60 per thousand viewers for an ad on "The Simpsons," according to a June 18 report from Michael Nathanson, an analyst at Sanford C. Bernstein & Co.
Despite advertising being twice as expensive on the Internet, companies are continuing to buy time. Marketers at big brands like Intel, General Motors and others are shifting spending strategies to sites like Hulu for the next season.