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Summary:

Having a loyal, attentive audience is paying off for premium video content portals like Hulu and TV.com in the form of higher CPMs than what the networks are getting. Bloomberg reports that for the recently concluded TV season, for the first time, ads presented during shows […]

Homer2Having a loyal, attentive audience is paying off for premium video content portals like Hulu and TV.com in the form of higher CPMs than what the networks are getting.

Bloomberg reports that for the recently concluded TV season, for the first time, ads presented during shows like The Simpsons and CSI are getting higher ad rates online than they are on TV. Citing a recent report from Sanford C. Bernstein analyst Michael Nathanson, Bloomberg writes that The Simpsons got a $60 CPM on Hulu. A typical prime-time ad on television carries a $20-$40 CPM.

Though it’s important to remember that Hulu caps the number of ads it runs, thereby limiting the amount of revenue Hulu can generate. Hulu runs four ad spots during an episode of The Simpsons, which using Bernstein’s CPM figure, would generate $240 per thousand viewer. That same episode on FOX would carry 16 commercials (roughly 8 minutes worth of commercials), which on the low end at $20 would yield $320 per thousand viewers.

It’s been pretty well-established that premium video sites have been able to attract higher CPMs than their TV counterparts. As Liz wrote back in October:

“TV networks like CBS say they have always been able charge higher CPMs for the same shows online vs. TV, but that their digital revenues are not yet significant enough for that difference to be meaningful. Even by 2013, when eMarketer thinks advertisers will spend $5.8 billion on online video ads in the U.S., that will amount to just 7.6 percent of total TV ad spend and 9.8 percent of total Internet ad spend.”

Hulu isn’t shy about touting its ad effectiveness. Last year, the company released stats saying that Hulu increased purchase intent by 28 percent and message association by 22 percent. Meanwhile, 93 percent of Hulu users surveyed say Hulu has the right amount of ads.

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  1. This is misleading. The CPM may be comparable, but the revenue is way different. The number of viewers on broadcast is close probablt more than 1000X the number of on-line viewers of an episode (7M vs 7K).

  2. This is misleading. The CPM may be comparable, but the revenue is way different. The number of viewers on broadcast is probably more than 1000X the number of on-line viewers of an episode (7M vs 7K).

  3. CBS’ Smith: OnDemand Online Will Bring More Ads Tuesday, July 14, 2009

    [...] some of the TV economics,” to be able to better pay for the production of premium content. As we’ve written, video online can charge higher CPMs than broadcast, but the frequency cap limits how much can be [...]

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    [...] Simpsons Worth More on Hulu Than on FOX (via NewTeeVee) [...]

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