• Here's What Fox, NBC and Hulu are Doing with Increased Online Ad Loads

    Get ready to see more ads in TV programs viewed online. Following my exclusive 2 weeks ago about ABC doubling the number of ads in its iPad app, and soon on ABC.com, the same increased ad load is happening with Fox's and NBC's online programs, and in my opinion, likely with Hulu as well. Here's what I've learned:

    Fox - Fox has begun selling 2 ads per "pod" and when prior 1 ad/pod campaigns expire, this will become the standard according to Bill Bradford, Fox's SVP of Content Strategy. The pods could include one or two 30 second spots or mix in 15 second spots as well. They could even be a single 60 second spot for sole share of voice.

    I watched a couple episodes of "Glee" online and already found 2 ads/pod in all pods. In addition, to a companion banner, Fox also uses a small "leave-behind" branded bug in the lower right corner of the video window. Bill confirmed the same research ABC's Albert Cheng shared with me, that doubling the ad load doesn't diminish brand recall, engagement or other metrics.

    NBC - NBC has been quietly selling 2 ads/pod online for the last year-and-a-half according to Peter Naylor, NBCU's SVP of Digital Media Sales, who said that about 30% of its streams now carry 2 ads/pod. Peter broke down its campaign offerings as follows: "owned" (still 1 ad/pod, with advertiser owning all the pods for 100% share of voice), "scaled" (1 ad/pod, but with 2 advertisers sharing placements) and "shared" (2 ads/pod with 2 advertisers maximum sharing  the inventory).

    The "shared" approach is what NBC is emphasizing going forward, with a  target of 50% of streams carrying 2 ads/pod by the end of this year (it was just 20% a year ago). Peter said that all of NBC's research shows that the relevant metrics - favorability, recall, purchase intent, etc. - are unaffected by doubling up. I asked Peter whether he could see more than 2 ads/pod at some point and he said NBC would rather see more creativity and interactivity in the ads than push the quantity up further.
    Hulu - A Hulu spokesperson told me that Hulu doesn't have a set policy on the number of ads per pod, but rather is striving to balance offering the most effective ad platform for advertisers with achieving the best return for its content partners. That includes the right mix of targeting, ad format and the ad load itself. Hulu has gained notice recently for its "ad selector" which allows viewers to choose which ad they want to watch. Beyond advertising, rumors have been rampant that Hulu will be launching a subscription service soon. My bet is that with Hulu's parents ABC, NBC and Fox all doubling their ad loads, it's virtually inevitable that Hulu will as well.

    (Note, a CBS spokesperson said the company was not yet ready to talk about its ad policy.)

    When I put my consumer hat on, more ads are of course a bummer. However, with my industry analyst hat on, I think it's absolutely the right thing for the networks to be doing. As I said in the ABC post, it's imperative that the networks try to achieve online economics that are as close to those of on-air as possible. This is important so that networks will be indifferent to whether viewers watch via online sources or on-air. With connected devices like Roku, Xbox, TiVo, and soon Google TV proliferating, it's foolish to try block online consumption in any way. Making their programs as accessible as possible and monetizing them fully is crucial. That makes doubling the ad inventory the right thing to do.

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