NBCOlympics.com’s Online Video Ad Revenue: A Puny $5.75 Million: Analyst
That’s the estimate from eMarketer: it says that the online video advertising on NBCOlympics.com will reach a relatively small $5.75 million, only 1.1 percent of this year’s online video ad spending projection of $505 million in the US. No methodology of how they arrived at that figure, so take it for what it is worth..I have asked them about how they arrived at this figure..more when I get more.
They do give some reasons of why it could be this low: Even with the Olympics’ popularity, much of the record traffic on NBCOlympics.com was not video viewers. The fact that users were forced to download Microsoft Silverlight, as oppose to using Flash, may have hampered its chances to get an even bigger audience. Maybe NBC will chime in now…
For reference, last week, NBCU claimed $10 million in total Olympic ad sales. Earlier, Lehman Brothers analyst Doug Anmuth forecast that internet ads will attract only $70 million, out of a global $1.5 billion ad spend across all media content related to the Beijing Games.
Update: here’s how eMarketer came at the figure: NBC’s reported video streams the first seven days (25.6 million), averaged out over whole 17 days of Olympics (with increase in daily average for more video viewers over time), estimated 1.5 ads per stream, estimated $50 CPM. Seems reasonable and simple enough, but also consider that the ad packages on the site are likely to be both video and banners, so tough to break out.
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Comments (1)
Aug 25, 2008 11:02 AM
Which shows one more time that online advertising does not work well with this type of content – which generates huge but short-lived spikes of high traffic, especially if the content has to be streamed. In this respect, the Olympics are very much like the Oscars or the Super Bowl. The best way to monetize this type of content is through the pay-per-download model. Ten or twenty cents to view a hot, good quality video is not much, but if multiplied by millions of streams, it can be a serious alternative to ads.
The problem is that those who decide on the content monetization strategies are the same people who sell ad space/time to the same handful of companies year after year. Pay-per-view would eliminate their jobs and the huge bonuses they get for… well, selling the same space to the same company for the usual $400K or something. Why would they recommend a different model?
(Naturally, there is also Mr Shirky who claims that “free” (that is, ad-sponsored) is always better, but this is another issue…)