TV Stations Break $1-Billion Mark in Online Advertising

NEW YORK: Broadcast TV stations in the U.S. surpassed $1 billion in interactive sales for the first time in 2008, growing their online ad revenues by 36 percent.

According to a report from the Television Bureau of Advertising (TVB), despite the economic downturn, TV stations are on a path to achieve $1.3 billion in online advertising this year, a further jump of 26 percent.

The report, Benchmarking: TV Web Sites Surpass $1 Billion, with research conducted by Borrell Associates, examines revenue sources, growth rates, site traffic and other interactive issues and offers benchmarking for stations in large, medium and small markets.

Research from the report also revealed that local TV-run websites continue to gain ground on newspaper sites. A local TV website beat out the largest newspaper site in 22 of the 80 markets surveyed, up from 16 in 2007. It also showed that the heaviest activity was in the Top 10 markets, where stations reported a 65-percent increase in website revenues in 2008. The average per-station revenue in those large markets surpassed the million-dollar mark for the first time, hitting $1.4 million.

Borrell Associates tracks interactive advertising for nearly 3,900 local websites in the U.S. and Canada through voluntary submission of data. This is the fourth year Borrell has conducted the benchmarking report for TVB. This year’s report focuses on data submitted by 718 TV stations.

Jack Poor, the VP of marketing at TVB, said, “Local TV stations are redoubling their interactive-sales efforts, aiming for high double-digit increases with an ever-increasing array of offerings. TVB will continue its multiplatform initiatives to help stations realize the full potential of this growth area.”

“We saw a remarkable thing in this year’s survey,” said Gordon Borrell, the CEO of Borrell Associates. “As we looked at the database of URLs, we saw that many broadcasters have branched out beyond merely selling banners on their ‘CallLetter.com’ sites. They’ve begun using the web to launch new products that compete directly with newspapers, yellow pages, and with each other. This was just theory or anecdotal until last year. Now it’s happening, and the launch of these new brands seems to be propelling those stations further ahead in revenues.”

Borrell also pointed out that the most successful stations have widened their benchmarking scope and are no longer just comparing themselves with other TV websites in the market, but with all local websites. “We see a handful of stations capturing five, 10, even 13 times the market share of local online advertising as their TV peers,” he added. “They are obviously doing things differently, beyond the broadcast up-sell to the web.”