Digital pennies and dimes soon to be digital half dollars?


Yesterday, Bill posted on Liz Gannes of NewTeeVee’s great summary on the growth of TV advertising dollars on the web, based on a study done by Convergence Consultants. That prompted commenter NN to write:

“Convergence thinks 4 minutes per half hour is the max people will tolerate online.” I just don’t get why they believe there is such a difference between online viewing and standard broadcast/cable viewing, do they provide any reason ?

I speculate that the answer to NN’s question is that it was by asking people questions rather than conducting exhaustive (and expensive) research on what people would actually do.   But, the good news is even if Convergence is correct, that essentially means the current amount of advertising can be increased significantly, as I have been frequently suggesting will happen.

Currently, most people are getting far less than four minutes of advertising per half hour.  A typical episode of Family Guy on Hulu carries three thirty second spots — 1.5 minutes, or 90 seconds.  Four minutes would be a 2.5 minute increase, and half  of the eight minutes worth of commercials per half hour typically seen on television.

Jeff Zucker is famously quoted for not wanting to trade analog dollars for digital pennies.  He’s updated that to digital dimes now, but even at the same rates as television, the recommended limits by Convergence would get things up to digital half dollars.

It’s frequently touted that online actually carries an advertising premium because of superior targeting capabilities.   I don’t think the 2X premium that would be necessary with half the commercials to even the online landscape with the television model is realistic.   But, a 1.3X premium is probably realistic.   In order to even things out with a 1.3X premium, you’d  need about six minutes of commercials per half hour, and I think it’s reasonable to expect something like that will ultimately happen.

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