Media Companies Lure Marketers with New Digital Entertainment Packages

Now that marketers have stampeded to online marketing, they have to worry about whether consumers will see their messages. tabletuserConsumers are spending more time than ever before online but there is also more intense competition for their attention. Some media providers are upping the ante and investing more money in quality online entertainment to get consumers to visit their sites.

Digital video advertising is expected to increase to $4.4 billion this year which is much smaller than the $66.35 billion that the traditional TV ad market commands. To grow their online video ad revenues, large media players like Yahoo, Hulu, and AOL are coming up with more original online entertainment. A recent  New York Times article described the recent Digital Content NewFronts event which mimics the traditional TV-​ad buying UpFront events and was sponsored by several large media firms. If media companies can convince marketers to commit to online video advertising for a season or a series, they can generate significantly more revenue than they’re getting from online display ads.

Industry experts worry that this strategy could result in disruption and fragmentation of the viewing audience.  Some analysts are concerned that the costs of production and advertising could far exceed the benefits of reaching a ‘narrow, narrow television audience.’ For now, this trend seems a bit experimental. The content is comprised mostly of inexpensive reality-​type shows. In addition, some media companies are showing their content in weekly installments while others are making the content available all at once. The lack of a filter on content quality may mean that the trend is short-​lived. But if a breakout hit or two comes along, this strategy will get the attention of consumers and advertisers.

To learn more about Online Video Watchers, check out the Audience Interests & Intent Report available on the Research Store at ad​-ology​.com.

[Source: Kaufman, Leslie and Vega, Tanzina. Media Giants Chase Online Ads with Original Shows. 6 May 2013. NYTimes​.com. Web. 14 May 2013] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.