April 10th, 2000
Sponsorships: When posting a banner ad just isn't enough
Jeremy Schlosberg

Andrew Susman is president and founder of Studio One Networks, a company that creates and syndicates original programming on the web that it distributes to multiple web sites in a model that resembles barter syndication on TV. Studio One creates the targeted programming then finds sponsors that align with the audiences most interested in the content. Among the major advertisers that have worked with Studio One to date are Honda, Nestles, Ford and Kellogg's. The original web programming Studio One has created and syndicated so far are "Your Baby Today," "Driving Today," and "Delicious Fun." Before he started Studio One in 1997, Susman was director of business development for Time Inc. New Media. Among his accomplishments there: he literally put up the first banner ad ever run on the Pathfinder web site.

To begin with, so we all know what we're talking about, how do you define the concept of sponsorship?

In its highest form, across all media -- so we're not just talking about internet sponsorships at this point -- I like to say that sponsorships are about visibly supporting good works.

If a sponsor can make it obvious to a consumer that they're providing something of real benefit, this a much different feeling than an intrusive product-driven or heavy sales-driven ad message. There's enormous impact when the sponsor is identified with supplying information and/or entertainment that may be of even greater interest to the consumer than information about the product itself. This is true in TV, in print and online. But obviously there are some very big differences online.

Like what? What's different about online sponsorships?

There are a number of important differences between online sponsorships and traditional media sponsorships, ranging from cost-effectiveness to the mode of impact and the measurement to how targetable it is and how much more leverage advertisers potentially have online compared to the leverage they have in traditional media.

Online there's so much more competition for people's attention that the advertiser is forced into to bring more to the relationship to get people's attention, as well as to leverage the momentum of the consumer's own interest. Online, people are goal oriented, seeking something in particular. Ideally, an advertiser wants to leverage that interest.

What specifically does sponsorship involve online at this point?

Well, it covers a pretty broad range of activities. But you can break it into two basic categories -- single-site sponsorships and sponsorships across multiple sites, which is sponsorship as syndication. In general, sponsorship on the web involves one of three things. There's sponsorship as simply a banner in a fixed position on a single web site. Another type of sponsorship is when an advertiser has a category-exclusive button on a web site.

This would be something like if a site offers its users the opportunity to search for books and Amazon.com sponsors and operates the book search?

Right. And then at the very high end of sponsorship on single sites you find customization of editorial product.

All of these are single-site types of sponsorships, where the individual web site has created some sort of sponsorship opportunity and finds advertisers to get involved. How does the syndication model work?

We see the internet as really the last frontier of full sponsorship, the only medium left where it's practical and affordable to recreate the days of full sponsorship.

It's really an unbelievable situation. If you think of TV with five or six credible networks, and maybe 30 to 35 cable networks with any substance, and compare it to the internet, where there are maybe 20 to 25 major networks at the top level -- and then underneath you have hundreds and hundreds of web sites. Clearly the market is big enough to be just about endless. The inventory here is nothing less than human attention. And I think the sponsor has a lot more leverage to bring programs to sites than in any other medium.

You mentioned this idea of recreating the days of full sponsorship. So you see some kind of parallel to what it used to be like on TV way back when?

Yes. In the early days of television advertisers always wanted to sponsor the programs. Those were the days of Jell-O and Maxwell House and Kraft.

When each program had only one sponsor, the exposure to even one of those telecasts had measurable effects that could be traced directly to the shopping cart. There's a tradition of research that shows that sponsorship is actually more effective.

Even much more recently, back in 1990, Norman Hecht did some research on television specials that found that there were lifts between 230 to 500 percent in top- of-mind brand awareness and advertising awareness and big lifts in purchasing intent as well.

Specials that were solo sponsored had huge lifts over scatter plans. Now then, the shifts to scatter plans from the Ô50s to today were beneficial in terms of reach and program choice, but they totally diluted the association between an individual brand and an individual program.

At the same time, the networks consolidated their power and chopped up inventory into 15- and 30-second units.

This also diluted the association between brand and program and cut down on ad effectiveness as well.

Obviously online doesn't offer the reach of broadcast. But what about online sponsorships might make them more attractive than TV sponsorship?

One key difference about the internet is that the measurement system is embedded in the medium itself. So we can show much deeper results, and the results to date have already been impressive. For example, users inside sponsored programs online are spending between 8 and 14 minutes with them. This time is all self-selected time -- it's not just a TV running. It's a different kind of involvement than wash-over broadcast or pass-through print.

What do we know about the impact of online sponsorships at this point?

Unfortunately not enough. Sponsorships already account for 46 percent of total online ad spending according to some estimates. EMarketer says that will go up to 58 percent by next year.

At the same time no one has figured out a solid way of quantifying sponsorship impact.

That's why we're involved with Bill Harvey and the New Media Model Committee at the Advertising Research Foundation.

The goal of that committee is to literally create a new standard of media measurement that takes other things into account besides page views and click-throughs -- to get beyond commodity measurements into the idea of how people are actually affected. Right now we're working with Bill to develop something called the Sponsorship Effectiveness Index. It's going to be a new measurement system that will judge higher-order effects of new media beyond page views and click-throughs and into how it's affecting people in terms of brand image, corporate image, purchase intent and so forth.

If sponsorships are already catching on and ready to catch on further, there obviously must be something attractive about it for the advertiser.

Well, unlike TV or print there's no control over the distribution of the internet, therefore sponsors have more leverage and they should use it. On a single site basis they use it as far as getting customization of programs in a programming environment. You can't do that with traditional media.

Many people are concerned with the potential that exists on the web more than in traditional media for blurring advertising and editorial content. Isn't this sort of blur even more likely with sponsored content?

As far as we're concerned, no. It has to be legitimate editorial -- if it isn't it won't create interest in either the consumer or the distributor. To be sure, if you're out there operating a single site on the web, you can really do whatever you want.

But the real test is are people going to pay attn to it. For our model to work, editorial integrity is paramount. The reason it's paramount is because if the editorial is perceived not to be of value, the user won't spend eight minutes with a program; as a result, the distributors who are carrying a program won't accept it. In this model, you have no choice. Everything rests on legitimate quality material that's going to engage consumers.

-Jeremy Schlosberg is the senior editor for new media.