CBS chief research officer David F. Poltrack told attendees at a conference yesterday that the company actually takes in more advertising money when a person watches one of its shows online than it does when someone watches the show on traditional television.
While the internet is seen by many as a disrupter of CBS’s core business, Variety reports that Poltrack told the 2014 Media & Entertainment Industry Forum in New York that CBS makes between 10% and 20% more ad money per viewer when people stream its content online.
According to Variety, Poltrack said advertisers are willing to pay more because they struggle to find other high-quality video content online. And, because the online ads can’t be skipped with a DVR, people are more likely to remember the ads and brands they are exposed to.
The scarcity that has helped bolster CBS’ online ad prices will likely decrease in the coming years as web properties like New York Times, Buzzfeed, AOL, and Yahoo all continue pouring money into producing online video of their own with the hopes of matching the quality and viewership of the big broadcast networks.
The effects of greater supply could, however, be balanced out by greater demand. eMarketer estimates U.S. advertisers will spend $US12.7 billion on digital video advertising by 2018, more than triple the $US4.2 billion they spent in 2013.
Still that $US12.7 billion would pale in comparison to the $US66.4 billion advertisers spent on U.S. traditional television last year.
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