At the Advertising Research Foundation’s (ARF) 2011 annual re:think convention, a key issues forum presentation was held entitled HIGH VALUE MEDIA PLACEMENT STRATEGIES. The panelists discussed insights into the future of online video commercialization. Online video commercials were compared to tv video commercials. Panelists include Stacey Lynn Schulman-Sr. Vice PresidentAd Sales & Sports Research at Turner Broadcasting System & Lisa Quan-Vice President, Director of Audience Analysis at MAGNAGLOBAL. The panel was moderated by Artie Bulgrin-SVP, Research and Analytics at ESPN.

1. HIGH VALUE MEDIA
PLACEMENT STRATEGIES
Moderator
Artie Bulgrin
SVP, Research and Analytics
ESPN

3. Insights for the Future of Online
Video Commercialization
Stacey Lynn Schulman Lisa Quan
Sr. Vice President Vice President
Ad Sales & Sports Research Director of Audience Analysis
Turner Broadcasting System MAGNAGLOBAL

4. TV Everywhere – The Elegant Solution
Stakeholder Concern Interest Solution
Broadband HH do not
Protect Exclusivity of • Authentication
MSO subscribe to cable/
Content Distribution requirement
satellite/telco
• Greater ad load
monetizes inventory
Expand Access of
Sustainable Internet content library to grow • Extended screen
Content Provider measurement expands
video business model viewership across
platforms audience delivery for
program valuation and
marketplace currency
• Disabled fast-
Viewer Control (fast
forwarding through
forwarding) diminishes
Advertiser Commercial skipping commercial breaks in
communication value of
on-demand
advertising
environments
• Expanded access to
content
Wider Access and • Fresher content
Viewer Content availability Control of Viewer • Greater control of
Experience experience thru
greater variety of
on-demand platforms

5. The Million Dollar Question
Will consumers watch full length television programs
online with a full linear ad load?
• What is the optimal online ad load that maximizes
both the consumer experience, as well as
advertising exposure and revenue?
• Is viewing to 30-minute shows (comedies) and
60-minute shows (dramas) affected differently
by varying degrees of advertising load

6. Background
No real world research
• Previous studies involved attitudinal research
• Lack of solid consumer behavior data
• Most survey based studies were directionally the same,
revealing online advertising acceptance has largely
been studied
– In comparison to television
– Across demographic groups
– Based in general acceptance
• Results had conflicting findings
• Some behavioral research emerged in last 6 months
(CW/Freewheel)

7. Problems
Is it too late?
Is it too late to introduce greater commercialization into
the online video space?
• Consumer attitude reporting is fulfilled
– Easier to achieve
– Multiple sources but not entirely cohesive
• More exacting research on consumer behavior is missing
– Need is strong and growing for actual behavior
– Technologically complicated
– Commitment by parties involved
• Time
• Money
• Platform
• Content

8. Methods
A first step
Turner and MAGNAGLOBAL partnered in order
to get a first look
• Designed study to give users an unobtrusive and
unbiased viewing experience
• Expectations of uncovering differences in claimed
versus observed online tune-out
– Self report data subject to speculation
– Mechanical observational methods are not open
to conjecture

9. We Tested Turner’s Most Recent Episodes
7 Days After Linear Air

10. Research Design
• Online multivariate test design using Turner and
Optimost technology
• Panelists were randomly selected once arriving at
TNT.tv or TBS.com – not pre-recruited to participate
• This was a “blind” test – consumers were completely
unaware of our intervention

11. Research Design
• Fast forwarding was disabled during the ad breaks, but was
enabled during the program content, simulating Turner’s
current TV Everywhere environment

12. Research Design
• Ad load was varied across 6 test cells
– Included a mix of different ad creative and network promos,
as well as :30’s ad :15’s
• Optimost randomly selected, rotated and served ads from
a pool of TV commercials provided by Magna & Turner,
eliminating bias

13. Panelists Were Randomly Assigned to
One of Three Test Cells
TNT Dramas = 5 ad blocks TBS Comedies = 4 ad blocks
Cell 1 Cell 2 Cell 3
Linear+ Ad Load Modified Ad Load Online Ad Load
20 Min Ad Load 10 Min Ad Load 1:15 Min Ad Load
Cell 1 Cell 2 Cell 3
Linear+ Ad Load Linear Ad Load Online Ad Load
16 Min Ad Load 8 Min Ad Load 1 Min Ad Load
n = 1000+ per cell. Note: on average, hour long original TNT dramas contain ~17.5 mins of non-program content, including
national and local commercials, as well as network promotion. TBS original comedies, such as Meet The Browns, contain
~8 minutes of non-program content.

14. MAGNAGLOBAL Partnership Provided
Turner With Multiple Brand Categories
• Automotive • Health & Beauty
• Beverages • Pharma
• Consumer • QSR
Electronics • Technology
• Durable Goods • Tourism
• Entertainment
14

15. Advanced Technical Implementation was Essential
to Precisely Measure Time Spent Viewing
Stream viewing and ad viewing were both tracked in
5 second increments to ensure precision in analysis
Optimost Beacons
V. Start 5 10 15 20
0 5 10 Ad Block

16. What Did We Already Know About How
Consumers Watch Long Form Content Online?
On average, consumers watch about half of full length sitcoms
and dramas on TBS.com and TNT.tv with limited ad load
2010 Original Series Multiplatform Viewing Summary - TBS and TNT
Through Linear Premieres of June 31, 2010
Online2 VOD3
Avg. Episode Estimated Avg. #
Starts (000) TSV per Ep. Orders (000) Avg. TSV
Episodes Per Episode Start (mins) Per Episode per Order
Meet the Browns 16 67 16 308 21
My Boys 2 74 18 97 21
Neighbors from Hell 10 39 16 115 18
Online2 VOD3
Avg. Episode Estimated Avg. #
Starts (000) TSV per Ep. Orders (000) Avg. TSV
Episodes Per Episode Start (mins) Per Episode per Order
The Closer 3 170 23 317 36
Rizzoli and Isles 3 190 29 312 41
Hawthorne 6 97 24 216 38
Memphis Beat 6 84 29 221 39
Leverage 7 176 29 301 38
Source: Broadband data from Omniture; VOD data from Rentrak.

17. TNT Viewing Pattern is the Same
Regardless of Length of Ad Breaks
% of Panelists Viewing by Segment
100%
Episode credits
80%
60%
40%
20%
0%
Linear+ Ad Load Modified Ad Load Online Ad Load
n = Total Sample. Differences across cells are not statistically significant.

18. Varying Ad Loads Did Not Affect
Time Spent Viewing
Viewers watched ~29 minutes across all 3 test cells
Consumers watched more of the program in the Modified and Online
Ad Load scenarios, but they do not watch longer
Average Minutes Viewed per Viewer
and % Program Completion Rate
30 29
Mins Mins 26
Mins
(49%) (56%) (59%)
Linear+ Ad Load Modified Ad Load Online Ad Load
n = Total Sample. Differences across cells are not statistically significant.

19. TNT Online Video Commercial Retention
Rate is HIGHER Than Live Television
Commercial Retention Rates on TNT
100% 98%
92% 94%
Live TV Linear+ Ad Modified Ad Online Ad Load
Load Load
“Commercial Retention Rate” = live commercial rating/live program content rating for Live TV and average # panelists
viewing per ad minute/average # panelists viewing per program content minute. n = Total Sample.

20. TBS Viewing Behavior Follows a
Similar Pattern
Excessive, Linear+ Ad Load shows slightly steeper decline
% of Panelists Viewing by Segment
100%
80% Episode credits
60%
40%
20%
0%
Show Ad Block 1 Show Ad Block 2 Show Ad Block 3 Show Ad Block 4 Show
Segment 1 Segment 2 Segment 3 Segment 4 Segment 5
Linear+ Ad Load Linear Ad Load Online Ad Load
n = Total Sample. Note: Heavy Ad Load exceeds TBS’ current linear ad load for original comedies by ~8 minutes.
Differences across cells are not statistically significant.

21. Varying Ad Loads Did Not Affect
Time Spent Viewing
Viewers watched for ~14 minutes across all 3 test cells
Consumers watched more of the program in the Modified and
Online Ad Load scenarios, but they do not watch longer
Average Minutes Viewed per Viewer
and % Program Completion Rate
15 14
Mins Mins 13
Mins
(37%) (45%) (40%)
Linear+ Ad Load Linear Ad Load Online Ad Load
n = Total Sample. Differences across cells are not statistically significant.

22. Commercial Retention for Linear
Ad Load Online is on Par with Live TV
Linear+ Ad Load was well in excess of Linear
Ad Load and resulted in more ad skipping
Commercial Retention Rates on TBS
96% 92% 93%
79%
Live TV Linear+ Ad Linear Ad Load Online Ad Load
Load
“Commercial Retention Rate” = live commercial rating/live program content rating for Live TV and average # panelists
viewing per ad minute/average # panelists viewing per program content minute. Note: Heavy Ad Load exceeds TBS’
current linear ad load for original comedies by ~8 minutes. n = Total Sample.

23. What We Learned
• Time Spent Viewing
Regardless of ad load, consumers will spend approximately the
same amount of time watching full length episodes online
• Commercial Retention
Commercial audience retention in an online environment is
equal to or better than Live TV for full length episodes
– These findings are consistent for both hour-long dramas and
half-hour sitcoms
• Advertising Exposure
Online episodes with ad loads resembling traditional linear
television drive significantly more ad exposures than limited
advertising scenarios

24. Conclusions
Agency perspectives
There is clear opportunity
• Fall-off in viewership minimal after first break
– Significant number of people watched to conclusion
• Suggests that audiences will accept expanded
advertising in online video
– More inventory means more brands can participate

25. Conclusions
Agency perspectives
There is more work to be done
• Study viewer behavior during online video consumption
• Compare online video engagement versus traditional
television
• Determine ad-avoidant behaviors occurring when
watching online video; explore ways to counter
– Minimizing
– Muting
• Identify differences in viewing by genre
– Dramas, comedies, reality, etc.

26. Conclusions
Agency perspectives
• Further evolution of accountability
– Nielsen’s Extended Screen initiative very limited right now
• Requires identical commercial loads
• No full agreement by content owners
– Measurement should be tailored to the process, not the other
way around
– TV Everywhere is not necessarily the definitive answer
• Represents the blending of metrics
• Even C3 was not meant to be a final currency
• Future needs will push innovation
– Demographic and behavioral targeting

27. Conclusions
Media perspective
• TV Everywhere is a WIN-WIN-WIN-WIN
for the industry
– WIN for Viewers – More content on more platforms at
no additional cost
– WIN for Cable Operators – Better offering for their customers
– WIN for Cable Networks – More platforms and more viewing
for harder to reach viewers
– WIN for Advertisers – More impressions and better
demographics for their TV advertising
• Online commercialization is a well-tolerated trade-off
for consumers to avoid paying for content

28. Questions