Ads Become Content On Streaming Media Sites

Cable World, July 9, 2001 by Richard Cole

Yahoo! sees high demand from marketing departments

In the heady early days of the Internet, many pioneers saw the new medium as a noncommercial source of information and entertainment, an alternative to the traditional advertising-dominated media, particularly television.

What a difference a decade makes.

The demands of the marketplace have accelerated the Web's evolution from a noncommercial public service into a business. So much so that the Internet is now boldly going where broadcast and cable TV tread gingerly--producing programming that is virtually nothing but advertising, but looks like information and entertainment.

On the broadband-video side, Yahoo!'s enterprise division is jumping on the trend, selling Web-broadcasting services to companies for prices ranging from $250,000 for the basic package to several million dollars for all the bells and whistles.

"The demand for using Internet broadcasting is a very high-focus item within marketing departments," says James Lewandowski, Yahoo!'s VP-sales. "Since marketing folks understand the value of advertising from the past, it's easy for them to recognize Internet broadcasting for its intrinsic value."

We're not talking fly-by-night Internet companies here. Customers moving into the new-media arena include automobile manufacturers, pharmaceutical companies, financial-services providers and well-established packaged goods companies.

One of Yahoo!'s first Webcasting customers was Ralston Purina, which launched its Purina TV site in May. Interested pet owners can click on the "dogs" or "cats" category at Purina.com and then the Purina TV link and watch short clips on vaccinations, keeping pets healthy in hot weather, providing proper nutrition--with Ralston Purina products, naturally--or training their new puppy or kitten. Keyed to pop up alongside the video streams are ads for appropriate Purina products.

One popular video highlights the Stupid Dog Tricks Contest, liberally laced with frequent visuals for Purina product and contest sponsor Beggin' Strips. Or viewers can watch video from sled-dog races or instruction on how to build proper fencing or teach Rover to catch a Frisbee.

Purina's site encourages visitors to sign up for contests and offers, and that's one key for the marketing department, which can then target those who register with email and other promotional efforts, says Lewandowski. The bottom line is brand loyalty.

"We're trying to meld the combination of what streaming can do, along with that allowing our clients to acquire statistics and the demographics of the people who actually look at the site," he says. "The real purpose of this is to try and build an alliance with pet owners, more so than just trying to sell."

Another Yahoo! customer, Sabre's Travelocity travel website, will launch its Internet-video service later this summer. And Yahoo! is in the process of signing several other major clients, all of whom are trying to leverage their digital-video assets.

"What you're seeing is that you've got a lot of companies that might have 20,000 pet videos or 20,000 videos on travel," says Yahoo! public relations manager Chris Homan. "They're coming to us and saying, `Can you make a broadcast center for us where it's got channels so I can go to a Mexico channel and see all my Mexico videos or go to a Europe channel and see all the Europe videos.'"

The Yahoo!-Ralston Purina's approach to marketing with Web video seems staid in comparison to BMW. The German auto manufacturers has turned product placement on its ear by making its cars the center of a series of very slick Internet films by top filmmakers including Fight Club's David Fincher and Guy Ritchie, director of Lock, Stock and Two Smoking Barrels.

The site and its Web films, clearly aimed at reinforcing BMW's hip, upscale image, are promoted during the carmaker's television commercials

Each film on the BMW Films site stars Clive Owens as the driver, a mysterious man who tools around in the featured BMW model. In the short film The Superstar, the driver gives an insufferable singer--played by Ritchie's wife, Madonna--her comeuppance with a wild, tire-screeching ride that not incidentally shows off BMW's speed and handling.

Visitors can stream the movies, but the site also offers a special media viewer designed by Apple's QuickTime division allowing broadband surfers to download the films and then watch them full-screen in surprisingly good quality.

"These guys are doing amazing things," says Philip Schiller, Apple's VP-worldwide product marketing. "This is the first I've seen of this scenario where they use TV ads to get you to go to this site and see the longer pieces on the website that were designed and directly filmed for their web site at BMW Films."

While Ralston-Purina and BMW represent two new forays into marketing with Internet video, the traditional TV-style commercial is also alive on the Web. The recently launched Yahoo! Broadcast service, for instance, allows visitors to watch a full-length black-and-white version of Douglas Fairbanks's The Thief of Baghdad as long as they put up with a Motorola wireless-phone ad first.