Peter VanRysdam / Digital Marketing / March 19th, 2008

Advertising Online is More Effective Than TV. I Won't Say I Told You So.

I read this jewel of an article today…

Are Internet ads better than TV ads?

BURLINGAME, Calif.–Here’s a figure you want to remember: 80 percent retention rate.

Approximately 80 percent of people who watched videos on the Web site of broadcaster ABC (through the company’s player) could remember the sponsor/advertiser of the program, said Brad Davis, senior vice president of online media sales and marketing for the Walt Disney Internet Group, during a presentation at the Digital Living Room conference taking place here. (Walt Disney is the parent company of ABC.)

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So even though I’ve told you before that the Internet is a more powerful advertising resource than newspapers (here, here, and here), I guess never did mention how the Internet is better than TV.  Well, it is. 

So why is it better?  Well, there are two perspectives that need to be addressed: the advertiser’s and the consumer’s.

Advertisers love cable channels, because they give access to very specific groups.  I see that every time I’m hiding in my closet watching “What Not to Wear” on TLC.  Inevitably a tampon commercial comes on, reminding me just how far I am from the target audience. 

Well, the Web has basically millions of little cable channels.  Sure, advertisers need to work with more sites the get the ads to the same number of people, but the result is well worth it.  In most cases there is just one ad before a news story or other video.  Unlike the new Tivo world we live in, customers can’t fast forward.  As the only ad with a captive audience, it’s no doubt retention rates are higher.

Sure, we haven’t begun to see how advertising will be most prevalent on the Web (overlays ala YouTube or pre-video ala CNN.com), but we can be sure they’ll work the kinks out as more and more people more to the Web for entertainment.  More than 154 million Americans will watch online videos this year. According to eMarketer, that’s a 12.1% increase from last year.

For consumers I think it’s also better.  You control what you watch.  You create the channel.  And along with that the commercials are shorter.  No need for the shotgun approach of plastering tons of ads on tons of channels like we see on TV.  Highly targeted ads like you see online are more expensive for the advertiser, but much more effective. 

I think it’s a win win.  I love what www.hulu.com is doing with their ad model.  Short, periodic commercial breaks of no more than 15-30 seconds 5 or 6 times in a full length movie.  Last time I watched a two hour movie on TV it took 3 and a half hours! 

Look for more networks to go the way of HBO.  With advertisers flocking to the Web, they’ll need to make money somehow.

Or they could all just move online too. 🙂