Of Michael Jackson and CPMs

In this post-Michael Jackson era, the media onslaught borne from Jackson’s demise is one that deserves the intense picking over it has received. First is the notion that the news itself was broken by a blog (tmz.com), which is good for digital media’s future. Then there are the curious and still not necessarily authenticated stories as to how Jackson’s death very nearly broke the Internet, which may be not so good for digital media’s future.

Perhaps more interesting to those in the online world, Jackson’s death suggests how radically the consumption paradigm has shifted. A not-so-random survey of friends and colleagues showed that most people discovered the news through Facebook or Twitter, despite the fact that the break-it-down-so-you-can-mourn-effectively coverage emanated from television at the same time. So though you heard about it online, you turned to the tube for your “real” news. Score one for TV.

And so the TV/online war continues. The latest salvo in this little war was a series of news reports pointing out that ads on Hulu for shows such as “The Simpsons” and “CSI” are more expensive than they are on broadcast TV. According to Bloomberg.com, it is very nearly double the cost on Hulu for the 2009-2010 ad-buying season. “Marketers typically pay $20 to $40 per thousand viewers for a prime-time ad. On Hulu, which began offering shows to the public in March 2008, an ad on the animated series ‘The Simpsons’ costs $60 per thousand viewers, Michael Nathanson, an analyst at Sanford C. Bernstein & Co. wrote in a June 18 report,” reported Bloomberg.com.

But while that may be true, it’s a little like comparing apples and oranges. That’s because on Hulu, you get only 37 seconds of ads compared to 9 minutes on broadcast TV. So while a CPM (define) is more expensive online, content creators and owners make significantly less money — fully one-third — online than on TV. Not to mention the number of parties that are splitting that smaller pie, as Hulu is an entity owed by News Corp., NBC Universal, and Disney/ABC. The center can’t hold. The costs of “The Simpsons” may have declined somewhat after 20 years of being on TV, but not one-third less. It’s not even really news that online CPMs are high. It’s more the death rattle of the current model, highlighting its radical unsustainability rather than suggesting that a more effective system is coming into play.

Each piece of the media puzzle has its role. In the case of Jackson, tweets and Facebook comments let you know what happened, while more traditional media let you experience it. And the reverse is somewhat true when you look at recurring programs that you might watch online. You’re aware of the hit because it is or was on TV, giving it the credibility and exposure. You experience or re-experience it online, thanks to the wonders of technology and distribution.

Bottom line: conversations about CPMs matter somewhat in trying to get the dollars to flow from the agencies and brands. But that’s yesterday’s conversation. It’s an ecosystem. Work it like one.

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