Fox sees convergence of online, broadcast ads and audience

Jim O'Neil

editor's corner
Fox Broadcasting this week said it plans to start counting online viewers as part of its TV audience and to start mirroring its TV shows' load of ads on episodes that run online, whether at or on Hulu, a major breakthrough in the way networks view online video.

"This is what our business is becoming," said Fox's President of Ad Sales Toby Byrne. "There shouldn't be a different commercial experience by virtue of which way you choose to watch our content."

Fox presented its plan as part of its annual upfront ad-sales period, during which the networks often reveal new shows and line up much of their coming year's advertising commitments.

But the ad plan took center stage as networks have accelerated their efforts to find ways to take advantage of an upbeat advertising market. Fox, as have other networks, has begun to see a rebound in ad revenues compared to the down years of 2008 and 2009, when revenues fell off the table as the recession clipped consumer spending.

But while adspend is expected to swell this year, Fox is getting a little nervous about a key broadcast measurement that's starting to wobble: audience. The network has seen a drop in its prime audience, the coveted 18 - 49 demographic, of 5.4 percent last year, according to The Wall Street Journal. Fox is counting on, and doing so publicly, and Hulu to ease that pain.

"While broadcast has suffered some erosion, there is some audience watching on and Hulu that mitigates some of that," Byrne said. "This adds a little bit of that supply back into broadcast television."

And that explains why some analysts, including marketing information service Warc, expect this to be a boom year for online advertising. The company forecast Internet adspend to be up 12.4 percent in the U.S. this year, while TV will rise 3.8 percent. And while it expects TV to maintain the lion's share of the ad pie, nearly 40 percent, online adspend could make up 20.4 percent.

Fox isn't the first network to experiment with bundling online ads in broadcast deals, CW launched its "convergence strategy" last year, and ad buyers have been pretty solidly behind it... as have revenues, reported the Journal, increasing audience and commercial views.

If Fox finds buyers for its bundles, and revenues continue to grow, it won't be long until all the networks buy in, and online video, officially, will have arrived in the mainstream.--Jim

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