Last year, TNS and the Conference Board found that 16% of American households with Internet access watched television Internet TV. That figure has risen to just over 19%.What is it that makes consumers turn on the computer instead of the television? The main reason, found the study, was the lack of restriction from schedules and location. Ad skipping and portability were among other benefits cited.

What are they watching in Internet TV? The most popular category being watched online is the news, with 43% of the 10,000 households surveyed tuning in. Thirty-nine percent watch dramas, 34% comedy/sitcoms, 23% reality shows, 16% sport and 15% user-generated content.

Where are they watching it? Ninety percent of online TV viewers watch at home and 15% find time to watch at work. Six percent watch from “other locations” which would include via mobile devices while on-the-go.

“Most consumers are pressed for time and require flexibility in their daily schedules and TV viewing habits,” said Lynn Franco, director of the Conference Board Consumer Research Center.

“Being able to watch broadcasts on their own time and at their convenience are clearly reasons why we are seeing a greater number turning to the Internet. And, it is the reason why we would expect to see this trend continue.”

The top streaming destinations are official television sites, with 65% of viewers, and YouTube, with 41%.

Online video ad network LiveRail (our profile) has just released a ‘State Of The Industry Report’ for Q3 2008. It reports that video ad spending currently only represents 2.36% of all online advertising, but that it is expected to grow over 55% next year. Right now only 20.95% of internet video streams are being monetized. LiveRail also noted that NBC’s online Olympics coverage failed to monetize well, however Hulu.com is doing good business. Indeed LiveRail states that Hulu will be a more successful business than YouTube, because of its ability to sell advertising across 100% of its inventory - compared to just 3% for YouTube.In July we reported that Hulu is set to earn $90m in its first year. After paying off their content partners, Hulu’s net revenue will probably be between $12.5 million and $25 million. This seems like a success, surely, but we had some doubts. “As Hulu grows in popularity,” we wrote, “their bandwidth, marketing costs, and overhead will increase as well, and it will remain a struggle for the company to earn revenue.” Source: ReadWriteWeb

Everybody wants a write off and charitable contributions top the list for most consumers - and businesses. But, did you know those philanthropic contributions and activities could also give a brand boost? According to a recent report, charitable actions can lead consumers to action.

The report finds that nearly three-quarters of consumers have purchased a brand because it supported a cause they believed in. Corporations reported seeing an increase in sales of more than 25% after the public relations from helping a favored cause.

When you add this historical data to the new offerings of the Internet, cause marketing can have an even greater effect.

Consider the recent Haagen Dazs viral promotion to let consumers know the honey bee was in danger. The ice cream company, which relies on honey bees for a number of it’s flavors, launched a multi-platform campaign which included television and print ads as well as an online video featuring “b-boys” dancing. The video quickly became viral with teens and young adults sharing content and adding the video to their own social network profiles.

Two weeks after the launch on August 1, the video had 2 million views and 3500 comments as well as a 4 ½ star review on YouTube. About 150 websites and blogs have also picked up the video, which increased hits to the Haagen Dazs branded micro site.

While the plight of the bees is still up in the air, the effect on Haagen Dazs brand can already be seen in the increased consumer interest to the ice cream maker’s site and the hits to the video.

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	5		Feist on Sesame Street   YouTube 1033 new posts 674,915 views
	6		The Dark Knight Trailer *NEW* Good Quality!   YouTube 678 new posts 13,497,712 views
	7		Produced By Pharrell - Santogold, Julian Casablancas, N.E.R.D.   MySpace 618 new posts 1,140,828 views
	8		Western Spaghetti by PES   YouTube 593 new posts 921,948 views
	9		Simon’s Cat ‘TV Dinner’   YouTube 590 new posts 1,685,869 views
	10		Lively by Google   YouTube 545 new posts 871,611 views
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  Source: www.viralvideochart.com

China’s booming Internet population has surpassed the United States to become the world’s biggest, with 253 million people online despite government controls on Web use, according to government data reported Friday.

The latest figure on Web use at the end of June is a 56 percent increase from a year ago, the China Internet Network Information Center said. It said the share of the Chinese public using the Internet is still just 19.1 percent, leaving more room for rapid growth.

The United States had an estimated 223.1 million Internet users in June, according to Nielsen Online, a research firm. The Pew Internet and American Life Project puts U.S. online penetration at 71 percent.

“This is the first time the number has drastically surpassed the United States, becoming the world’s No. 1,” a CNNIC statement said.

The communist government encourages Internet use for business and education but tries to block access to Web sites deemed pornographic or subversive. Web surfers have been jailed for posting or e-mailing material that criticizes communist rule or is deemed a violation of vague national security laws.

Beijing blocks access to Web sites run by dissidents, human rights groups and some foreign news media. Web surfers were blocked from seeing Google Inc.’s YouTube and other foreign sites with video footage of anti-government protests in Tibet in March.

Internet companies are looking forward to a new growth spurt once Chinese mobile phone carriers roll out third-generation, or 3G, technology that can support Web-surfing and other services. No date has been announced, but with more than 500 million mobile accounts, China has a vast pool of potential wireless Internet users.

China’s Internet boom has gotten a boost from a sharp slowdown in demand for fixed-line phones as more customers opt for mobile service. Fixed-line carriers have responded by expanding into broadband Internet, Web-based cable television and other services. The CNNIC report Friday said that as a result, 214 million Chinese now have high-speed access.

With the Olympic Games just a month off, some brands are looking to extend their sponsorships with social media programs. Lenovo has created 100 athletes’ blogs in an attempt to align itself with some less mainstream sports, such as field hockey and modern pentathlon. It gave the athletes laptops and video cameras to chronicle their preparation for the games.

“We wanted to do something that shows our tech prowess, not something that uses the Web as billboard,” said David Churbuck, vp of global Web marketing at Lenovo.

Lenovo turned to Google for help with the program. Google is providing blogging software via Blogger and video hosting through YouTube.

In keeping with the ethos of the social Web, Lenovo is not hosting the blogs on its own site. Most athletes either had their own sites or established them for this project. Lenovo is adding distribution by highlighting the blogs on its Web site at www.lenovo.com/voices.

Lenovo has asked the participating athletes to show a “Lenovo 2008 Olympics Blogger” badge on their sites. Most have done so, said Churbuck. It isn’t asking for any mention of Lenovo products, he added.

“I don’t want to be in the position of telling them what to write,” he said. “It’s their blog, they can do what they want.”

The blogging program is complemented with a Facebook effort that lets users virtually identify themselves with their country’s teams. Federated Media and Citizen Sports created country applications users can add to their profiles. So far, more than 100,000 have been downloaded.

” A brand like Lenovo working within Facebook is interesting because that’s the nut that a bunch of people are trying to crack,” said Jeff Ma, CEO of Citizen Sports. “Most brands and agencies don’t even know how to advertise on Facebook. There’s still a lot of education.”

Lenovo’s not alone in expanding its Olympics marketing socially. McDonald’s has also expanded on its traditional Olympics advertising with a social strategy centered around its first alternate-reality game. Called “The Lost Ring,” the AKQA-created game has been operational since April. In that time, McDonald’s boasts more than 2 million visitors in 100 countries have played it at some level. “The Lost Ring” challenges players to solve mysteries surrounding the Olympics.

“It’s an opportunity to engage with the youth culture around the world in a very meaningful and creative experience — one I’d say they can’t get anywhere else,” said Mary Dillon, McDonald’s chief marketing officer. “We want to be on the cutting edge of innovations.”

Dillon said the by-product of taking a plunge into a new area like an ARG is the rub-off effect it might give the McDonald’s brand among young consumers.

“We would hope the same community would be a little surprised McDonald’s is bringing this to them,” she said.

McDonald’s is pleased with participation rates for the game, Dillon said, though she admitted some of the extra benefits, like positive buzz, were more difficult to quantify than traditional ad metrics.

Those intangibles were the lure of the Lenovo athlete-blogging program, said Churbuck.

“The old model of blunt impressions, the billboard model, is not going to do it for me,” he said. “I’m far more interested in how many comments we drove, the traffic to athletes’ blogs, downloads of the applications. Those are more tangible expressions of engagement with the brand than clicks.”

Source: adweek.com

If behavioral targeting is the great hope for display advertising on the Web, can it work for videos as well? Web video startup Veoh thinks it can and is bringing its behavioral targeting advertising program out of beta today. The ads are targeted at one of nine groups, including viewers interested in action videos, cars, pop culture, sci fi, anime, and family fare.

Veoh groups viewers into these interest groups based on their past viewing, searching, browsing, tagging, and commenting activities on the site. The ad-targeting technology uses some of the same underlying algorithms as its recommendation engine, and were both developed by chief scientist Ted Dunning. He previously built the recommendation engine at MusicMatch (later bought by Yahoo) and credit-card fraud detection algorithms at ID Analytics. The company claims that during the beta, ads that were behaviorally targeted performed twice as good as ads that were not.

Everyone’s trying to figure out how to make ads work on Web video—from YouTube to VideoEgg. A big issue is the quality of the video inventory out there. Many advertisers don’t want to risk associating their brands and products with user-generated video. That includes a large portion of the 100 million videos a month watched on Veoh.

Also, for behavioral targeting to really work, it needs to be done at Internet scale. Veoh not only needs to prove that it can provide better response rates to its video ads, but that it has a large enough inventory of advertiser-safe videos to matter. To do that, it would have to somehow monitor video-watching behavior beyond its own site (which it could do via partnership agreements) and become more of an overall video ad network. It would then have to make sure it doesn’t get tangled up in some of the privacy issues that behavioral targeting for display ads are running into.

Source: TechCrunch.com

Product placement and corporate sponsorships have been seeping into new, user-generated turf lately. Last year, Dr Pepper sponsored production of a music video by YouTube star Tay Zonday, who is Web famous for his song “Chocolate Rain.” This year, Sprint Nextel is offering a few bucks to people who incorporate a new Samsung phone into a home video and post the results to YouTube. The first 1,000 videos to incorporate the Instinct phone get $20 apiece, and one grand prize-winning entry will win $10,000.

“There are lots of people making a pretty good living off of being Internet famous,” said Tim Hwang, organizer of a recent conference in Cambridge, Mass., dedicated to semi-serious discussions about Web culture. “Matt’s a notable example because he’s been able to do it for so long.”

Internet culture, Hwang said, has spent most of its existence in its own in-jokey world, but that’s changing quickly. And as deep-pocketed corporate entities turn to user-generated channels looking for attention, there’s no telling how things will play out.

“It’s still an open question whether big business is going to play Internet culture’s game, or if Internet culture is going to play the big business game,” Hwang said.

It’s easy to understand why sites like YouTube are attractive to advertisers and corporate sponsors. Getting a 30-second commercial on the air in front of a prime-time audience costs hundreds of thousands of dollars; uploading a video to YouTube costs nothing. Big-name entities from Revlon to Coldplay have recently sponsored contests on the video site.

Greg Sterling, analyst at marketing research firm Sterling Market Intelligence, said that it’s sometimes tough to determine whether popular phenomena like Harding’s dancing videos result in actual sales. The California Raisins commercials were a hit in the ’80s, for example, but the Claymation marketing campaign did little for the sale of actual California raisins.

In terms of brand recognition, though, Stride’s sponsorship would have to be considered a success, he said. After all, we’re talking about it. “I’d never heard of Stride gum before; had you?” he asks. (I had not.)

Among the thousands of comments posted on the sites discussing Harding’s video, a few say they’re now going to buy Stride gum because of the company’s support for the project. But most log on to declare their affection for the video. “I’m pretty sure that is the best thing I’ve ever seen on the internet,” writes one anonymous viewer, in one of thousands of similar reactions posted to the Web. “How can something that goofy be that moving?”

So much buzz for a video? What about the product? Maximizing exposure, minimizing costs and having a satisfied and happy audience. Maybe this is the new ad trend for Youtube.com especially now that ad revenue has been decreased.

It appears that buzz targeting, demographic targeting, AdSense for Video, geo-targeting and even revenue share couldn’t bring in enough ad revenue to keep pre- and post-roll advertising from YouTube’s door.Things really must be tough if recent reports are true that the online video site is to adopt an advertising format that, according to its own survey, most of its audience dislikes.

According to YouTube group product manager Shashi Seth, “Pre-rolls and post-rolls did not perform well on our platform. [In our testing,] 75 percent of our users were unhappy with them.” Another limiting factor for YouTube is that they only sell ads on material that has been approved by media companies and other partners which, according to the WSJ’s recent coverage, accounts for just 4% of the site’s video clips. It will be interesting to see whether this move will see a backlash from YouTube users or perhaps a migration to other online video sites.

Nothing represents the changing of the guard as much as how the Big Three Portals have fallen from grace. Don’t get me wrong: from an operational standpoint, Yahoo! (YHOO) is a fine property, but that company is a bit of a… how do you say, disaster.

MSN is there, trekking along, costing Microsoft (MSFT) billions in losses over the years without really making a push for #1. Sort of like all other MSFT products not named Windows or Office, basically.

Meanwhile, Time Warner’s (TWX) AOL is drifting along, buying up more and more assets - some smart, some not - but now putting itself up for sale. While the company sold a 5% stake of itself to Google (GOOG) for a $1B sum - valuing itself for a tidy $20B - word is that it might be content with a $15B offer… which means either Yahoo!, MSFT, News Corp. (NWS), or Comcast (CMCSA) would show an interest.

While some will be quick to say the portals lost to social networking sites such as Facebook and MySpace, make no mistake about it, they lost to search. Revenues matter, everything else is noise. Google has the web ecosystem in the bag, and considering that Google’s YouTube is more dominating in video than Google is in search - and that video is the next high growth opportunity after search’s decade - then you have to wonder how much more hurting Google can put on the Web.

When you consider how leadership in search helped Google propel itself to King of the Web, you sort of understand why MSFT just shelled out $100M for something that basically can be summed up as Wikipedia site search.