Insights for the Future of Online Video Commercialization

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A presentation entitled Insights for the Future of Online Video Commercialization given at the Advertising Research Foundation’s (ARF) AM 6.0 conference held in 2011. Test on online commercial viewing done by TBS was presented. The presentation included the research design and methods used as well as the findings. The presentation was given by Stacey Lynn Schulman-SVP, Ad Sales & Sports Research at Turner Broadcasting Sales, Inc.

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Insights for the Future of Online Video Commercialization

  1. 1. Insights for the Future of OnlineVideo CommercializationEmerging Hot Topics Part I – #3 Stacey Lynn Schulman SVP, Ad Sales & Sports Research Turner Broadcasting Sales, Inc.
  2. 2. TV Everywhere: The Elegant SolutionStakeholder Concern Interest Solution Broadband HH Protect ExclusivityMSO do not subscribe to of Content Authentication requirement cable / satellite / telco Distribution Greater ad load monetizes Expand Access of inventoryContent Sustainable Internet content library to Extended screen measurementProvider video business model grow viewership expands audience delivery for across platforms program valuation and marketplace currency Viewer Control (fast forwarding) Disabled fast-forwardingAdvertiser Commercial skipping diminishes through commercial breaks in communication on-demand environments value of advertising Expanded access to content Broadband HH Wider Access and Fresher contentViewer do not subscribe to Control of Viewer cable / satellite / telco Experience Greater control of experience thru greater variety of on-demand platforms #ARFAM6
  3. 3. The Million Dollar Question Will consumers watch full length television programs online with a full linear ad load? What is the optimal online ad load that maximizes both the consumer experience, as well as advertising exposure and revenue? Is viewing to 30-minute shows (comedies) and 60-minute shows (dramas) affected differently by varying degrees of advertising load. #ARFAM6
  4. 4. BackgroundNo Real World Research Previous studies involved attitudinal research Lack of solid consumer behavior data Most survey based studies were directionally the same, revealing online advertising acceptance has largely been studied: – In comparison to television – Across demographic groups – Based in general acceptance Results had conflicting findings Some behavioral research emerged in last 6 months (CW/Freewheel) #ARFAM6
  5. 5. MethodsA First Step Turner and MAGNAGLOBAL partnered in order to get a first look – Designed study to give users an unobtrusive and unbiased viewing experience – Expectations of uncovering differences in claimed versus observed online tune-out Self report data subject to speculation Mechanical observational methods are not open to conjecture #ARFAM6
  6. 6. We Tested Turner’s Most RecentEpisodes 7 Days After Linear Air #ARFAM6
  7. 7. Research Design Online multivariate test design using Turner and Optimost technology Panelists were randomly selected once arriving at TNT.tv or TBS.com – not pre-recruited to participate This was a “blind” test – consumers were completely unaware of our intervention #ARFAM6
  8. 8. Research Design Fast forwarding was disabled during the ad breaks, but was enabled during the program content, simulating Turner’s current TV Everywhere environment #ARFAM6
  9. 9. Research Design Ad load was varied across 6 test cells – Included a mix of different ad creative and network promos, as well as :30’s ad :15’s Optimost randomly selected, rotated and served ads from a pool of TV commercials provided by Magna & Turner, eliminating bias #ARFAM6
  10. 10. Panelists Were Randomly Assigned to One of Three Test CellsTNT Dramas = 5 ad blocks TBS Comedies = 4 ad blocks Cell 1 Cell 2 Cell 3 Linear+ Ad Load Modified Ad Load Online Ad Load 20 Min Ad Load 10 Min Ad Load 1:15 Min Ad Load Cell 1 Cell 2 Cell 3 Linear+ Ad Load Linear Ad Load Online Ad Load 16 Min Ad Load 8 Min Ad Load 1 Min Ad Load n = 1000+ per cell. Note: on average, hour long original TNT dramas contain ~17.5 mins of non-program content, including national and local commercials, as well as network promotion. TBS original comedies, such as Meet The Browns, contain ~8 minutes of non-program content. #ARFAM6
  11. 11. Magna Global Provided Turner withProminent Brands Across Categories Automotive Packaged Goods Technology Pharma / OTC Financial QSR Travel Entertainment Durable Goods #ARFAM6
  12. 12. Precise Time Spent Measurement Stream viewing and ad viewing were both tracked in 5 second increments to ensure precision in analysis Optimost Beacons V. Start 5 10 15 20 0 5 10 Ad Block
  13. 13. What Did We Already Know About How Consumers Watch Long Form Content Online? On average, consumers watch about half of full length sitcoms and dramas on TBS.com and TNT.tv with limited ad loadriginal Series Multiplatform Viewing Summary - TBS andViewing Summary - TBS and TNT 2010 Original Series Multiplatform Viewing Summary - TBS and TNT 2010 Original Series Multiplatform TNT Linear Premieres of June 31, 2010 Through Linear Premieres ofof June 31, 2010 Through Linear Premieres June 31, 2010 Online2 VODOnline2 3 VOD Online2 Avg. Episode Estimated Avg. #Episode Avg. Estimated Avg. # Avg. Episode Estimated Avg. Starts (000) TSV per Ep. Orders (000) Avg.TSV per Ep. Starts (000) TSV Orders (000) Starts (000) TSV per Ep. Orders Episodes Per Episode Start (mins) Episodes Episode per Order (mins) Per Per Episode Start Per Episode Episodes Per Episode Start (mins) Per Epirowns Meet the Browns 16 67 16 16 308 67 21 16 308 Meet the Browns 16 67 16 308 My Boys 2 74 18 2 97 74 21 18 97 My Boys 2 74 18 97 from Hell Neighbors from Hell 10 39 16 10 115 39 18 16 115 Neighbors from Hell 10 39 16 115 Online2 VODOnline2 3 VOD Online2 Avg. Episode Estimated Avg. #Episode Avg. Estimated Avg. # Avg. Episode Estimated Avg. Starts (000) TSV per Ep. Orders (000) Avg.TSV per Ep. Starts (000) TSV Orders (000) Starts (000) TSV per Ep. Orders Episodes Per Episode Start (mins) Episodes Episode per Order (mins) Per Per Episode Start Per Episode Episodes Per Episode Start (mins) Per Epi The Closer 3 170 23 3 317 170 36 23 317 The Closer 3 170 23 317d Isles Rizzoli and Isles 3 190 29 3 312 190 41 29 312 Rizzoli and Isles 3 190 29 312 Hawthorne 6 97 24 6 216 97 38 24 216 Hawthorne 6 97 24 216Beat Memphis Beat 6 84 29 6 221 84 39 29 221 Memphis Beat 6 84 29 221 Leverage 7 176 29 7 301 176 38 29 301 Leverage 7 176 29 301 Source: Broadband data from Omniture; VOD data from Rentrak.
  14. 14. Varying Ad Loads Did Not AffectTime Spent Viewing Viewers watched ~29 minutes across all 3 test cells Consumers watched more of the program in the Modified and Online Ad Load scenarios, but they do not watch longer Average Minutes Viewed Per Viewer and % Program Completion Rate 30 29 Mins Mins 26 Mins (49%) (56%) (59%) Linear+ Ad Load Modified Ad Load Online Ad Loadn = Total Sample. Differences across cells are not statistically significant. #ARFAM6
  15. 15. Online Video Commercial RetentionHIGHER Than Live Television Commercial Retention Rates on TNT 100% 98% 92% 94% Live TV Linear+ Ad Modified Ad Online Ad Load Load Load“Commercial Retention Rate” = live commercial rating / live program content rating for Live TV and average # panelists viewing per adminute / average # panelists viewing per program content minute. n = Total Sample. #ARFAM6
  16. 16. Viewing Pattern Is The Same Regardless of Length of Ad Breaks % Of Panelists Viewing By Segment100% Episode credits80%60%40%20% 0% 1 2 3 4 5 t1 t2 t3 t4 t5 t6 ck ck ck ck ck en en en en en en lo lo lo lo lo m m m m m m B B B B B eg eg eg eg eg eg d d d d d A A A A A S S S S S S w w w w w who ho ho ho ho hoS S S S S S Linear+ Ad Load Modified Ad Load Online Ad Load n = Total Sample. Differences across cells are not statistically significant. #ARFAM6
  17. 17. Varying Ad Loads Did Not AffectTime Spent Viewing Viewers watched ~14 minutes across all 3 test cells Consumers watched more of the program in the Modified and Online Ad Load scenarios, but they do not watch longer Average Minutes Viewed Per Viewer and % Program Completion Rate 15 Mins 14 Mins 13 Mins (37%) (45%) (40%) Linear+ Ad Load Linear Ad Load Online Ad Loadn = Total Sample. Differences across cells are not statistically significant. #ARFAM6
  18. 18. Commercial Retention for Linear AdLoad Online Is on Par with Live TV Linear+ Ad Load was well in excess of Linear Ad Load and resulted in more ad skipping. Commercial Retention Rates on TNT 96% 92% 93% 79% Live TV Linear+ Ad Linear Ad Load Online Ad Load Load“Commercial Retention Rate” = live commercial rating / live program content rating for Live TV and average # panelists viewing per adminute / average # panelists viewing per program content minute. Note: Heavy Ad Load exceeds TBS’ current linear ad load for originalcomedies by ~8 minutes. n = Total Sample. #ARFAM6
  19. 19. Viewing Behavior Follows a Similar Pattern % Of Panelists Viewing By Segment100% Episode credits80%60%40%20% 0% 1 2 3 4 5 1 2 3 4 k k k k t t t t t en en en en en oc oc oc oc gm gm gm gm gm Bl Bl Bl Bl Ad Ad Ad Ad Se Se Se Se Se ow ow ow ow owSh Sh Sh Sh Sh Linear+ Ad Load Linear Ad Load Online Ad Load n = Total Sample. Note: Heavy Ad Load exceeds TBS’ current linear ad load for original comedies by ~8 minutes. Differences across cells are not statistically significant. #ARFAM6
  20. 20. What We Learned...Time Spent Viewing Regardless of ad load, consumers will spend approximately the same amount of time watching full length episodes onlineCommercial Retention Commercial audience retention in an online environment is equal to or better than Live TV for full length episodes These findings are consistent for both hour-long dramas and half-hour sitcomsAdvertising Exposure Online episodes with ad loads resembling traditional linear television drive significantly more ad exposures than limited advertising scenarios #ARFAM6
  21. 21. Conclusions TV Everywhere is a WIN-WIN-WIN-WIN for the industry – WIN for Viewers – More content on more platforms at no additional cost – WIN for Cable Operators - Better offering for their customers – WIN for Cable Networks – More platforms and more viewing for harder to reach viewers – WIN for Advertisers – More impressions and better demographics for their TV advertising Online commercialization is a well-tolerated trade-off for consumers to avoid paying for content #ARFAM6
  22. 22. Questions #ARFAM6

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