Reckitt-Benckiser to Shift $20 Million to Web

From TV

Decision Driven by Need for More-Efficient Ad Rates

By Andrew Hampp

Published: March 30, 2009

NEW YORK (AdAge.com) -- Reckitt-Benckiser will cap off its fifth straight year of organic sales

growth with a new recession-approved media strategy: moving TV dollars to online video.

The company plans to shift an estimated $20 million in TV ad dollars to the web for more than 15 of its

brands, including Lysol, Air Wick, Mucinex, Finish and Clearasil. The strategic shift is significant for

the company, which has traditionally spent upward of 90% of its $475 million measured-media budget

on TV, and less than $1 million in measured spending on the web in 2008, according to TNS Media

Intelligence. Even though its 2008 internet advertising through the first half was already double its fullyear

internet spending in 2007, it was still only 1% of media spending.

Planting roots online

The effort goes into effect April 1 and will include partnerships with over a dozen video ad networks

such as Glam, Tidal TV, YuMe and Brightroll.

Marc Fonzetti, Reckitt-Benckiser's media manager and internet specialist, said the company has dabbled

in social media and e-mail-based consumer-relationship management promotions in the past, but had yet

to plant any major roots in online video until now. "We've seen a fundamental shift in consumer

consumption and media habits migrating over to digital video. Obviously YouTube started it, but we

want to aligned with professional content," he said. "With broadband getting to the scale that it has, the

shift has happened. The integration of traditional and digital media is here now."

Reckitt-Benckiser's spending shift from TV to online has been in the works for over a year, but was

accelerated by a need to find more efficient pricing for the cost to reach a thousand viewers, otherwise

known as a CPM, said Adam Kasper, senior VP-director of digital media for R-B's digital media agency,

Havas' Media Contacts. "The CPM was the driving factor here. We needed to make it compelling from a

buying standpoint in terms of how these CPMs related to TV CPMs, and we had to deliver the

impressions more efficiently than TV did," he said, referring to a more targeted audience.

That's why the company opted for ad-serving networks over TV network sites such as Hulu, ABC.com,

CBS.com and NBC.com, as the latter often charge significantly higher CPMs than ad networks. Mr.

Kasper said Media Contacts and Reckitt-Benckiser pushed hard for CPMs that were "well into the single

digits" to get more bang for its newly digital bucks, and described the results as a first for online video.

"To have a big TV advertiser take such a big portion of their TV budget and put it into online video, and

to do so with such an aggressive goal from a pricing standpoint, really shook up the industry."

Focus on ROI

A still-nascent industry at that, however. Scott Ferber, CEO of online video ad network Tidal TV, said

the main factor that has prevented major consumer package goods companies such as Reckitt-Benckiser

and others from investing heavily in online video has been the volume of inventory required to buy TV equivalent audiences. The CPMs took a hit for networks such as Tidal TV, because "when you buy

volume, you have to buy cheaply because volume costs," he said. With the recession also driving pricing

down, Mr. Ferber expects online CPMs to reach a more stable level over the next three years.

R-B's Mr. Fonzetti said the campaign will be measured using a method that combines TV's gross rating

points with the web, with additional interactive layers such as online coupons and click-throughs driving

traffic to each brand's microsite. Each brand's audience metrics will then be paired with data from

Nielsen's Homescan panel, a shopper product that uses ad exposure on TV and the web to determine instore

purchasing behavior.

"Everything is ROI-focused and needs to be accountable," Mr. Fonzetti said. "That's why this program

has taken us so long to develop. We want to make sure everybody is comfortable behind this."