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Broadband Changing Dynamics of Advertising Business, Says Nielsen Analytics Study

Posted on: Wednesday, 24 January 2007, 12:00 CST

HOLLYWOOD, Calif., Jan. 24 /PRNewswire/ -- Nielsen Analytics today released a new report revealing that advertisers and television programmers are finding new and more lucrative advertising opportunities with broadband video. The study also determined that the use of broadband video actually extends the reach of traditional TV, and that broadband consumers are young, affluent, highly educated, and tend to have high speed web access virtually 24/7, making it an integral part of their lifestyle.

The study, "Whatever, Whenever, Wherever: How Broadband is Redefining the Economics of Television", is authored by industry analyst, Larry Gerbrandt, the head of Nielsen Analytics, and completed in partnership with Scarborough Research.

Editor's Note: Broadband Video -- also known as web video, Internet video or broadband television -- is streaming video fed from a web site.

"By researching controlled broadband access, this study concludes that programmers have the opportunity to create new revenue models to benefit content owners and their affiliated stations," said Larry Gerbrandt, general manager and senior vice president of Nielsen Analytics. "Such ad-supported models are uniquely adaptable to the broadband environment and are potentially superior to existing models because they can take full advantage of the digital environment. With broadband streams, for example, fast forwarding through commercials can be disabled making it more likely the consumers will watch the spots and possibly interact with them."

Despite growing numbers of prime time television shows being streamed (or pre-viewed) on network web sites, or the increasing popularity of user generated content (UGC), there has been no measurable negative impact on traditional television viewing. Video on PCs and iPods actually is expanding the audience of traditional TV programs, supported by the fact that total TV usage was at a record high in U.S. households at 8 hours, 14 minutes a day during the 2005-2006 TV season according to Nielsen Media Research data. Household viewing has risen more than an hour a day over the past decade -- or more than a half hour more per person.

"Advertisers and programmers using broadband have a unique advantage in the increasingly competitive advertising world," continued Gerbrandt. "Ad models can be customized and managed in a broadband environment, and interactivity can be embedded into the program in such a way as to enhance engagement which does not take viewers away from the enjoyment of the program."

Broadband Video Advertising Models

There is a general consensus that viewers prefer short web-served ads, though the market is split between 15-second and 30-second pre-rolls per program segment. Furthermore, because broadband video offers levels of interactivity and viewer engagement not possible in a traditional TV spot, that argues for a higher CPM.

But television -- especially the ad-supported kind -- works according to a very different revenue model, and systems such as broadband streaming and downloading, could represent a new frontier to be explored and exploited. However, the posting of copyrighted content to web sites still presents challenges that remain to be litigated.

About the Broadband Consumer

Broadband access across the U.S. has reached critical mass and is having a clear impact on user behavior.

-- According to Scarborough Research, a local market consumer research company, broadband consumers tend to have high speed web access virtually 24/7 -- at work, at home and increasingly across an array of portable devices such as laptops, PDAs and mobile phones. While only about 9% of US adults report spending 20 hours or more a week on the Internet, this number nearly doubles, to 17%, among those with broadband access at home. -- There is a strong correlation between education and Internet access, and the same holds true for broadband connections. Of the roughly one-third (33 percent) of U.S. adults reside in households without any Internet connection, 69% have only a high school degree or less. The comparable percentage for those in broadband households is one-third or 33%. Of all US adults, almost a quarter (24 percent) have a college degree or greater. This number increases to 35% among adults with broadband Internet access at home. Moreover, the overwhelming majority of those with post-graduate degrees have an Internet connection, and most of those have a broadband connection. -- Broadband consumers are upscale. According to Scarborough's findings, 17% of consumers have an annual household income of $100,000 or more, compared to 28% of those with broadband connectivity. Less than a quarter (21 percent) of all consumers live in homes worth $300,000 or more; but the figure is 30% for those consumers with broadband in their household. -- There is a clear generational divide in broadband adoption. The 18-34 demographic represents 34% of those with broadband connectivity in their household. Though consumers 55+ are less likely than their 18-34 or 35-54 year-old counterparts to be broadband customers, broadband penetration among this older age group will likely increase. The 35-54 demographic is currently most likely to have home broadband access (45 percent). How to Order

"WHATEVER, WHENEVER, WHEREVER: How Broadband is Redefining the Economics of Television" is available for purchase on-line at the Nielsen Online Store at http://www.nielsenmedia.com/. For more information about Nielsen Analytics, please email NielsenAnalytics@vnuinc.com, or call 323.860.4659. For a limited time, this analysis is available for $795. (U.S. Dollars).

About Nielsen Analytics

Nielsen Analytics is focused on creating leading edge research, analysis, strategic advisory and valuation services to companies in the media and entertainment space with a particular focus on the convergence of content delivery and consumer media technology. Nielsen Analytics utilizes the full portfolio of sister companies including Nielsen Media Research (television ratings), Nielsen Entertainment (motion picture, home video, music and interactive entertainment), and Nielsen//NetRatings (Internet usage) to deliver a whole media point of view. Nielsen Analytics is part of The Nielsen Company (http://www.nielsen.com/), a global leader in information services for the media and entertainment industries.

About Scarborough Research

Scarborough Research, an MRC accredited media and marketing service, (http://www.scarborough.com/, info@scarborough.com) measures the lifestyle and shopping patterns, media behaviors, and demographics of American consumers. Products and services include local market consumer insight studies in 80 Top- Tier Markets and several Mid-Tier Markets, Scarborough USA+ (a national database), Hispanic studies, customer relationship management and database integration solutions. With more than 30 years of experience, Scarborough measures 1,700 categories and serves a broad client base of approximately 3,500 subscribers including marketers, advertising agencies, electronic and print media, broadcast and cable television, radio stations, sports teams and leagues, and out-of-home companies. Surveying more than 210,000 adults annually, Scarborough is a joint venture between Arbitron Inc. (http://www.arbitron.com/) and The Nielsen Company (http://www.nielsen.com/).

Nielsen Analytics

CONTACT: Press: Karen Gyimesi of The Nielsen Company, +1-646-654-8631,or Allyson Mongrain of Scarborough Research, +1-703-451-3174; Sales: SomerKnowles of Nielsen Analytics, +1-323-860-4659

Web site: http://www.nielsenmedia.com/http://www.scarborough.com/http://www.arbitron.com/http://www.nielsen.com/

Source: PRNewswire

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