Sunday, August 10, 2008

Olympic Long Tails

In today's Sunday Times, their US media correspondent claims that broadcasters will lose money by moving coverage online.

Actually, let me run the maths: 34.2m viewers watched the Opening Ceremony on NBC and I understand that a 30sec ad slot cost $750,000. That's an implied CPM (cost per thousand viewers) of $22. A 30 sec web ad typically goes for $25 - now there is a bandwidth cost of around $2 to this, but the outcome is roughly the same for the broadcaster. For the advertiser this can be a targeted audience - eg sailing, horseriding, and far more measurable, so should carry a premium. I've seen niche channels able to charge $100 or more CPM for a 30 sec ad with a good outcome for all involved. All my experience tells me that online ads are more likely to be watched and more likely to be clicked on.

The problem is that NBC weren't brave enough, or geared up enough in their ad sales department to jump on this opportunity, so are time shifting their online Olympics coverage. The budget that the correspondent alludes to is going to more accountable media than television in these challenging times. I suspect that all of this will have totally changed by the next Olympics.

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