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Push in Online Car Shopping

Posted by Mort Greenberg on March 29, 2008


NBCU Is Hoping
Stake in DriverTV
Snags Ad Dollars
March 17, 2008; Page B8

In an effort to snare more of the automotive advertising dollars migrating online, NBC Universal is buying a sizable stake in DriverTV, a Web site and video-on-demand channel that specializes in videos aimed at car shoppers.

NBCU is paying about $6 million for a 35% stake in DriverTV, which has about $8 million in annual revenue, according to people familiar with the matter. Currently all DriverTV’s ad revenue comes from car makers, but the company, which is partly owned by the TV- and ad-production firm Radical Media, is hoping eventually to attract advertisers from other auto-related industries such as insurance.

Unlike most print and TV ads, each video can generate multiple revenue streams. First, car makers such as General Motors, Ford Motor and Toyota Motor pay Radical Media to create the three-minute narrated videos, which highlight individual lines of cars and their features, from dashboards to headlights. Then, they pay DriverTV whenever someone clicks on the video. Car makers can also buy banner ads on the site.

The videos are slickly produced and promotional in tone. The voiceover with a video on GM’s 2008 Cadillac DTS, for instance, says “all DTS models feature sophisticated design.”

The deal is part of NBCU’s plan to buy stakes in a variety of digital properties as a way to get a bigger piece of the growing digital-ad pie. The General Electric unit recently created a pet owners’ site with Procter & Gamble and is set to announce another deal within a month that it says would take it into another big advertising category. “This is a more niche way to replicate the cable model we built in the online world,” says George Kliavkoff, NBCU’s chief digital officer.

Still, NBC and DriverTV face some stiff competition. DriverTV goes head-to-head with popular auto-research sites such as, Time Warner‘s AOL Auto and Car dealerships have aggressively launched comprehensive Web sites that offer shoppers virtual vehicle tours and real-time inventory information.

As a group, car makers are the top-spending advertisers, shelling out roughly $20 billion for ad time and space last year. While the biggest chunk of those dollars has long been spent on television, car makers are shifting a growing portion online. GM, the second-biggest advertiser in the country behind Procter & Gamble, spent $1.2 billion on TV ads last year, down 11.4% from the year before, and its spending on newspaper ads slid 32% to $149.3 million, according to TNS Media Intelligence. Meanwhile, its spending on online display ads such as banner ads jumped 78% to $208.3 million, according to TNS. A similar scenario is playing at other auto companies such as Ford and Chrysler, which increased their spending on Internet display ads by 65% and 41% respectively, according to TNS. While Internet ad dollars pale in size next to TV ad spending, they represent the fastest-growing ad segment.

For DriverTV, the investment comes at a critical juncture. The site, which has been in beta testing since last summer, has only attracted a small audience. Many advertiser-driven Web sites and entertainment sites have been struggling with that issue, as they come to grips with the fact that compelling content often isn’t enough of a draw. Marketers and content creators are increasingly finding ways to piggyback on Web portals or media companies’ sites that already have significant Web traffic. DriverTV has also struck a deal to put its content on MySpace, the popular social-networking site owned by News Corp. (News Corp. also owns Dow Jones & Co., publisher of The Wall Street Journal.) Both NBC and DriverTV say they will seek to strike deals to place DriverTV content on other popular Web sites.

A partnership with NBCU is “an efficient way to generate traffic and eyeballs to our site, which can be expensive to do,” says Robert Friedman, Radical Media’s president of entertainment and media.

As part of the deal with DriverTV, NBCU will be able to put the car videos and information on other NBCU properties, from to NBC’s individual network sites and cable channels. For instance, the Web site for “Heroes,” NBC’s sci-fi hit sponsored by Nissan, may be able to include video and content about Nissan cars from the DriverTV site. The more distribution the content has, the more ad revenue the company can make, because car makers pay every time a consumer watches a video.

Write to Suzanne Vranica at


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