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CBS Makes Up to 20% More Ad Revenue Online Than TV per Viewer: Research Chief

CBS, like every other TV network, is seeing audiences increasingly shift to Internet viewing of programming — and that’s been a good thing for the Eye, according to chief research officer David F. Poltrack.

“We actually make more money per viewer streaming than we do on television,” Poltrack said Tuesday at the 2014 Media & Entertainment Industry Forum in New York, presented by the IESE Business School and Variety. “If you stream our programming online, you’re seeing a full complement of advertising — you can’t bypass it.”

On average, CBS generates 10% to 20% more ad dollars per viewer from Internet-streamed programs than TV. Poltrack expects that to differential to increase even more later in 2014 because of a dearth of inventory for premium video online: “There’s been a flight to quality this year. Demand for our online video is through the roof.”

For CBS shows streamed online, such as “The Good Wife” (pictured, above), viewers can’t fast-forward through the ads. That also means that brand recall and recognition rates are higher for Internet video than TV, Poltrack said.

Of course, one of the big reasons ad rates for premium Internet-streamed video are higher than TV is because the online audiences are smaller — and hence, harder to reach. Online audiences also skew toward younger viewers, which are a more desirable target for marketers.

In addition, TV ad spending is far greater than digital-video advertising today, although the Internet segment is growing as a faster rate (from a smaller base). TV advertising in the U.S. will grow 3.3% in 2014 to $68.54 billion, while digital-video ad spending will increase 41.9% to reach $5.96 billion, according to a recent study from eMarketer.

According to Poltrack, the top 30 TV programs today overall have the same size audience as the top 30 in 2000. The difference today, he said, is that “it’s just not all on the television set in the living room.”

The majority of TV viewing is still live on television, but it’s been shrinking. In the first quarter of 2014, 80% of TV viewing was live, compared with 89% in 2011 among adults 18 and older, according to Nielsen data.

Poltrack, as he’s inclined to do, discounted pundits who have predicted that the rise of Internet video will damage the TV biz. In a December survey commissioned by CBS, 28% of respondents said they were watching more TV than  a year earlier, while 55% said their viewing was about the same and 17% said they were watching less.

Up until recently, consumers were more likely to say they were watching less television, in spite of the fact that Nielsen data showed time spent viewing TV was increasing. “It used to be a more ‘socially correct’ statement to say you were watching less television,” Poltrack said. “Today, I would argue, it’s ‘socially correct’ to say you’re watching more television.”

As for the trend of younger consumers watching less television, Poltrack said that’s been a recurring theme over the past 40 years. “The reason (younger people) watch less TV is because they are not home as much — and as we get older, we spend more time at home,” he said.

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