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Are Internet ads better than TV ads?

Viewers can recall ad sponsors on Web better than they can recall who puts up TV ads, says a Disney exec. That spells a future where Web ads will sell for more.

BURLINGAME, Calif.--Here's a figure you want to remember: 80 percent retention rate.

Approximately 80 percent of people who watched videos on the Web site of broadcaster ABC (through the company's player) could remember the sponsor/advertiser of the program, said Brad Davis, senior vice president of online media sales and marketing for the Walt Disney Internet Group, during a presentation at the Digital Living Room conference taking place here. The study was commissioned by Walt Disney Internet Group and ABC. (Walt Disney is the parent company of ABC.)

As a result of the recall issue, the cost per impression for online video could begin to surpass the cost per impression for network TV, he said. (Cost per impression, or CPM, is a metric for measuring the cost of ads.) Todd Krieger, senior vice president at Denuo of the Publicis Groupe, concurred, adding that in some instances Internet advertising rates per CPM might already be comparable.

The figures are good news for publishers and Web companies that have had to stand back and watch Google zoom to glory through search ads. Search still accounts for at least half of the advertising spend on the Internet, but clearly there are opportunities for other models.

And for premium content, sponsorship--similar to how General Electric and Chevrolet advertised in the 1950s--seems to be the way to go. Sponsorships are the favored ad vehicles for ABC. Sponsors get three commercials in a one-hour program as well as signage on the interface.

Last year, Hewlett-Packard served as a sponsor in a series of Hannah Montana concerts streamed online. In the HP ads, Montana (the daughter of Billy Ray Cyrus--there's a guy you never expected to see again) took a picture of her fans in the front row. Viewers, mostly 7- to 11-year-old girls, could then go to a sponsored site to see pictures from recent concerts or even print pictures with HP's photo service.

A few years ago, Cadillac scored with a sponsorship deal, said Krieger. The car company offered free downloads to people who played Gotham Racing III. The download consisted of three new Cadillacs that could be used in the game.

Roughly 70,000 people downloaded the Cadillacs. "There was a vast increase in test drives," Krieger said.