Cwickies: Will They Be Sticky For Advertisers?
I can't help but comment on Viacom's earnings. On Thursday, the media giant beat Wall Street estimates, thanks largely to the filmed entertainment division's profit quadrupling. But the studio (Paramount and DreamWorks) is a much smaller part of the company than the 'Media Networks' division, which includes MTV, VH1, Nickelodeon, Spike TV, etc. I'd say Viacom's largest challenge moving forward is growing its ad revenue on these cable networks, which face huge challenges in the changing industry, and have been trailing the competition.
CEO Philippe Dauman addressed the issue in the conference call today, discussing its new ad strategy, which is particularly interesting because he'd previously resisted using commercial ratings.
In the conference call after the earnings announcement Dauman said the company has turned down some of the "upfront" advertising business to have more inventory available for the "scatter market" (last minute ad buys) during the TV season. Before several of the cable networks, including flagship MTV start using commercial ratings in the fourth quarter, Dauman says MTV aims to "reinvent the commercial break to maximize viewer retention." That means more, shorter commercials, and integrating content into commercials to keep viewers interested.
Dauman isn't the first to talk about this. The new CW network, a fusion of Warner Brothers, the WB and CBS' UPN has been playing with some of these new ad formats. Starting on August 10th the CW will be running 10 second TV commercials. The radio industry has started playing with even shorter time spots--one and two second blips with a sponsor's name. But this is perhaps an even bigger deal for the TV industry, which has been pretty loyal to the 30-second spot. The CW is calling the three 20 second ads for Electronic Arts "cwickies" that are running during "Friday Night Smackdown."
And these little cwickies will be paired with Electronic Arts commercials in stand alone ad breaks. Needless to say, the CW is being as flexible as possible with advertisers to make sure that ads aren't fast-forwarded through on TiVo. And now that Nielsen provides commercial ratings, we'll be able to see how sticky these "cwickies" are.
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