@ AOP: ITV Plans Friends Reunited Update, Encouraged By Growth In Turnaround Strategy

For those who wondered how ITV (LSE: ITV) will manage to to treble its online revenue to £150 million by 2010 (see previous post), some stats already show some improvements – the relaunch of ITV.com has almost doubled the site’s traffic. ITV consumer CEO Jeff Henry told the Association of Online Publishers conference at the London Hilton traffic had gone up 45 percent in a year, average dwell time had doubled and that 89 percent of viewers who watch a video clip watch all of the accompanying pre-roll video advert.
Forecasts: That last fact is most important, because – as per the “turnaround plan” unveiled in September – the broadcaster plans for 75 percent of that £150 million to come from web display, video and local classified advertising. ITV’s projections are based on McKinsey data forecasting UK online ad increases by 2010 (display from £0.4 billion in 2006 to £0.7 billion, classifieds from £0.4 billion in 2006 to £1 billion, video ads from £0.1 billion to £0.3 billion). “We’re working on a system that delivers individually targeted ads in to a video stream” and identifies when a viewer has already seen an ad in order to serve up and alternative.
Advertisers: Even so, with advertising creatives yet to throw their weight behind any single video ad format in what is still an emerging sector, ITV still has to turn its hope in to concrete gains. Henry: “We’ve got to bring the advertising world with us. We’ve got to instill a sense of experimentation. We’ll try things like product placement around our shows on ITV.com before we go anywhere near the television format (with that model).” “(ITV Local) allows us to target local classified advertising markets.”
Friends Reunited: Against competition from Facebook, MySpace and Bebo, the once-pioneering UK social network is looking long in the tooth, but, as part of this revenue hunt, will get a redevelopment: “Friends Reunited is unique – it has scale it has brand and is profitable (see previous post) … Continuing to grow with exciting plans developing for its next iteration.” “It’s very out of date except that it’s creating record levels for the last seven months in a row. Its traffic has been increasingly robust against such opposition. We’re not being defensive – we know that the challenge is the take Friends on to the next generation. All I can say is, that is well in hand.” Henry told me Friends Reunited last year pulled in between £20 million and £25 million for ITV, he said ITV’s online revenue last year was £50 million.
UGC: An audacious claim: “We can lay claim to have started the trend of user-produced clips – of course, now … known as ‘user-generated content’. From the earliest days of You’ve Been Framed, we’ve encouraged viewers to share their videos with us.” Historically, he’s right about such shows having played an important part in the cultural development of user-contributed material, pre-web.
Partnerships: As per the turnaround plan: “We know that partners are vitally important – online is collaboration and we know that our content is highly sought-after. Where appropriate, we will form partnerships that give access to our content … that give access to clips of our programming. The range of companies to work with is really impressive.” Henry’s slide included logos for Virgin Media (NSDQ: VMED), BSkyB (NYSE: BSY) and others.