Hulu, Getting Higher Ad Rates Than Their Network Counterparts

Networks like A&E, Scripps, and possibly even *CBS* are ready to test whether the much-hyped TV Everywhere concept will serve as a lucrative business model for online video, but there is news that premium video sites like Hulu and are finally starting to deliver ad rates that are greater than what the networks would get for their shows on air. Running an ad during The Simpsons on Hulu, for example, costs about $60/CPM, Bloomberg reports; running the same ad during prime-time on TV costs about $20-$40/CPM — or over 60 percent less in some cases.

For some sites, garnering these higher CPMs is nothing new — and to be clear, the quality of the content (and the site) determines whether they get the higher rates. But the fact that prime-time staples like The Simpsons and CSI are getting better CPMs online than on air is worth looking into. Content providers (and advertisers themselves) have long justified sky-high rates for prime-time TV ads, on the basis that such ads deliver unparalleled reach and branding power. TV ads still beat online video ads in terms of reach — just over 7.5 million unique viewers live streamed CBS’ NCAA championship game, for example, compared to the 17.6 million that tuned in on-air — but what about user engagement?

That’s where the shift in perception — at least from an advertiser standpoint — seems to be taking place.