An updated media brief issued to media owners in the last few weeks introduced a remuneration model based on defined measures of engagement. P&G, which owns brands such as Gillette, Pampers and Pantene, will now pay publisher sites running its campaigns more money for engaged users - for example, those who go beyond viewing ads and sign up to newsletters, play games or watch videos.

The media brief has been issued to a number of publishers spoken to by new media age. P&G would not comment on the change in digital strategy.

The concept of engagement has become a hot topic in the last year as advertisers look beyond cost per impression (CPM) and click-through rate (CTR) as a way to measure the success of an online campaign. Although engagement is a key aspiration of online advertising, P&G’s move has divided the industry, with publishers realising they’ll have to work harder for a share of its ad spend.

One digital sales executive at a magazine publisher working with P&G welcomed the move but said it issues a challenge to publishers to ensure they’re delivering.

“You can either run from it or embrace it and raise your game,” he said. “Smaller publishers have to be creative with it. It means we can’t afford to be woolly and fluffy when creating content. But it allows publishers to be more flexible with campaigns. We can go to editors and get them to rewrite the content if it’s not working. We can see what’s performing and change the game or content if it’s not working as well as it could. The content has to demonstrate commercial activity.”

A digital director at another magazine publisher said P&G could struggle to get publishers on board.

“There needs to be attention to engagement but click-through is still important,” she said. “Most publishers won’t be willing to adopt the model as they struggle to engage users.”

Nick Reid, outgoing head of UK sales at MySpace, questioned P&G’s move. “How do you qualify cost per engagement [CPE]?,” he asked. “The market already struggles to identify the effect of digital on a brand.”

Bill Murray, a consultant at the Association of Online Publishers (AOP), said, “P&G is tearing up the rulebook and creating a new set of measures, saying it will define what qualifies as successful.”

Jack Wallington, programmes manager at the Internet Advertising Bureau (IAB), said, “It’s not the way the whole market is heading, but looking at more than traffic is a good thing. But even with CPE and other statistics, people are missing a trick in terms of branding power. Even if users don’t click through they could still be engaged. I hope P&G takes that into consideration.”

The move to a cost-per-engagement model has also seen a mixed reaction from media agencies.

Jerry Lloyd-Williams, digital strategy director at media agency Mediacom, said, “It offers great accountability and makes the media buy a more collaborative experience as it becomes a more tightly knit unit. It will soon become more of a trend and is something we always recommend to our clients.”

Mediacom worked with Volkswagen and Times Online last year to create a CPE campaign, A Life More Streamlined, for the Volkswagen Passat. The agency paid Times Online each time a person watched video, listened to a podcast or downloaded material.

“Digital is less about advertising and more about engagement. An engaged user is of more value and quality,” said Lloyd-Williams.

Nick Suckley, co-founder of media agency Agenda21, said he wasn’t surprised by P&G’s move.

“I don’t necessarily agree with it as FMCGs don’t have a clear idea about digital, but they are data driven companies. The point is how can you measure the real effect of someone engaging? It’s impossible. I don’t think a category buyer at a supermarket would give a hoot. The key is reach and frequency.”

Procter & Gamble spent £2.2m on online advertising for the year to July 2009, according to The Nielsen Company. It’s the UK’s second biggest advertiser, behind the COI, with £176.2m spent in total during the first ten months of 2008.

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Cable providers have helped undermine the 30-second spot by supplying digital video recorders to their subscribers and offering ad-free video-on-demand services.

Now they are promising to help marketers reach TV watchers with new interactive advertising that seeks to engage viewers and borrows techniques from the Internet.

"It's about making the TV a more lean-forward medium than a strictly lean-back medium," said Bob Ivins, vice president of research and data products with Comcast Corp.

It's a goal that has long eluded the industry. While the Internet has blossomed as a medium that can deliver targeted audiences and accountable results, the cable industry has promised interactive advertising for years only to leave advertisers and investors disappointed with the progress.

Cablevision Systems Inc. plans to roll out an interactive service next month that will allow viewers to respond to a banner or pop-up on their screen during a commercial, and automatically order a coupon or product sample by pressing a button on their remote control.

"It allows us to combine the power of the Internet -- with its engagement, targeting and accountability -- with the power of the big screen," said David Kline, Cablevision's president of ad sales.

Cablevision said it expects to have several major brands involved this fall including Benjamin Moore, which will send coupons for free paint samples to viewers that respond to its ads with their remote.

Other major cable operators, like Comcast and Time Warner Cable Inc., have also added interactive advertising to their systems. And while the traditional TV ad is typically sold based on estimated audience size, many of these new ads are sold on a pay-for-performance basis more similar to Internet advertising.

Time Warner in January rolled out a "promotions on-demand" offering in its Los Angeles market. The ads direct viewers to interactive channels fully dedicated to marketing materials from an advertiser.

By July, there were 22 advertisers participating, including CKE Restaurants Inc.'s Carl's Jr. and Big O Tires LLC. On top of regular ad spots and a set-up fee, Time Warner Cable collects a fee each time a consumer clicks to the on-demand channel.

"Interactivity through the remote control seems to drive a higher response rate than driving audiences to get on the Internet or make a phone call," said Joan Gillman, president of media sales for Time Warner Cable.

Cablevision also provides interactive channels to advertisers, like Walt Disney Co., Mattel Inc. and the U.S. Navy. Once viewers are directed to the channels through an ad, they can use their remote to choose from a variety of marketing videos and they can opt to receive coupons in the mail or request a call from a salesperson.

"Using interactive techniques, we can get a targeted consumer to engage with a brand on TV for a much longer period of time than just a 30-second commercial," said Jacqueline Corbelli, chief executive of media agency BrightLine iTV.

The New York-based agency recently worked for Axe, a brand owned by Unilever PLC, on a campaign reaching 70 million homes on cable, satellite and other pay-TV systems for its Axe Dark Temptations, a chocolate-themed deodorant and body wash.

The ads appeared on RipeTV, an on-demand network targeting males 18-24 with extreme sports and other programming. Using pre-roll spots and pop-up banners, the ads prompted viewers to press a button on their remote to do things like enter a sweepstakes or play a game.

Kevin George, an ad executive at Unilever who oversaw the campaign, said "the response was great" because it reached its targeted audience "without interrupting them," in part because Unilever reached its targeted audience "in a place where they're comfortable, giving them the option to participate without interrupting them."

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The £5 billion corporation “probably has reached the limits of reasonable expansion”, he said, and hinted that the “multimedia empire” needed to be cut down in size.

Speaking at the Royal Television Society’s biennial convention in Cambridge, Mr Bradshaw said that “there may indeed be a case for a smaller licence fee” — although he added that any cuts would have to wait until the fee is next reviewed in 2013.

Entering the debate over the £6 million a year paid to Jonathan Ross, Mr Bradshaw said that the BBC was “right to be looking more carefully at what it pays its stars and executives”. Mark Thompson, the Director-General of the BBC, was paid £834,000 last year.

Mr Bradshaw’s speech, probably the most serious attack on the BBC by a minister since the aftermath of the Iraq invasion, marks an about-turn by the Government, which spent most of the past decade allowing the BBC to expand dramatically with online services and digital channels.

The Culture Secretary also made it clear that he wanted to scrap the BBC Trust set up three years ago by his predecessors, Tessa Jowell and James Purnell. The trust, under the chairmanship of Sir Michael Lyons who is a former Labour councillor, is the internal regulator of the BBC.

Mr Bradshaw said: “Although the trust has performed better than its predecessor, I don’t think it is a sustainable model in the long term. I know of no other area of public life where the same body is both regulator and cheerleader.”

Jeremy Hunt, the Shadow Culture Secretary, responded by accusing ministers of “taking yet more Conservative policies”. He said: “People will ask if there is any consistency whatsoever in media policy when the Culture Secretary has proposed abolishing a body set up by his own Government less than three years ago.”

Mr Bradshaw’s intervention comes less than a month after James Murdoch, the chairman of News Corporation in Europe and Asia, criticised the BBC’s “chilling” expansion plans and said that it should be smaller. The Culture Secretary said that Mr Murdoch was “right to raise questions about the BBC’s size, its remit and its impact on the rest of the British media industry”. News Corporation is the parent company of The Times.

But Mr Bradshaw also said that he disagreed profoundly with Mr Murdoch on other issues, adding that he was wrong to describe Britain’s media landscape as “Orwellian”. Mr Bradshaw said: “Being publicly funded or subject to statutory regulation does not equate with state control. East German TV was state controlled.”

The minister called for a public debate on the future of the BBC, saying that its fate was not a matter for “media moguls or politicians”. It was up to the public to decide whether “we want the BBC to survive and, if so, what do we want it to do and how do we want to pay for it?”

Mr Bradshaw was challenged after his speech by Sir Michael, who told him that the trust had been “set up by your predecessor, Tessa Jowell”, and had been given the job to act as “the ears, eyes and voice of licence fee payers”.

• Channel 4 and the BBC should be merged to protect children’s programming because broadcasters are failing teenagers, the creator of Grange Hill said yesterday.

Phil Redmond, who also created Hollyoaks and Brookside, said that a merger of the publicly owned corporations would free budgets to ensure that children were catered for.

Giving the Huw Wheldon Memorial Lecture at the Royal Television Society conference in Cambridge, Mr Redmond said that problems had arisen because “broadcasters have decided that childhood ends at 12”. He added: “If there’s nothing on, they reach for the remote. Disconnect.”

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The company has signed on at least six national advertisers to participate in the project, said Jim Maiella, a spokesman for the Bethpage, New York-based company. Cablevision customers will be able to use their remote control to click on an ad and get a coupon or free sample of the product by mail, he said. The feature won’t interrupt programming.

The cable industry aims to use interactive commercials to squeeze more money from a slumping ad market. The six largest cable companies, including Cablevision, created Canoe Ventures last year in a bid to introduce the ads nationally. The effort has been hampered by the technological limitations of older set- top boxes and privacy concerns, causing Canoe to suspend trials of its first product in June.

Cablevision got a jump on the rest of the industry in March, when it said it had begun testing of a new targeting technology. It can route ads to specific households based on demographic data, such as income, gender and ethnicity.

Berkshire Hathaway Inc.’s Benjamin Moore paint company is one of the first advertisers to sign on, Maiella said. When viewers see Benjamin Moore’s ad, they can push the select button on their remote control and get a free two-ounce color sample.

By the end of this year, Cablevision plans to expand the effort, letting customers click on an ad to see movie-like trailers for a product. By next year, customers will also have the ability to buy products via their television sets.

Cablevision rose 62 cents to $25.22 yesterday in New York Stock Exchange composite trading. The stock has climbed 50 percent this year.

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Floated on the stock market or with a minority stake sold to a trade buyer such as a US network, BBC Worldwide, which markets BBC programmes, magazines and merchandise around the world, could act as a global shop window for all UK television content.

"The BBC need only keep 20 to 25 per cent and a couple of people on the board and still be exercising [what it regards as] sufficient control," the person familiar with the strategy said.

"I think the debate will be over what type of sale it is and what percentage the BBC will want to retain.

"It could be a retail offer, it could be a listing with a large retail element or it could be a private placement."

Mark Thompson, the BBC director-general, said in a newspaper interview published yesterday that one question to be answered in a strategic review announ-ced last week is whether it would be necessary to retain full ownership of Worldwide. However, a listing is only one possibility and not the most likely, a BBC executive said.

A partial flotation of a business built on licence-fee payers' money could be hard to justify, the executive said. In the past, the Treasury has opposed any idea of partial equity sales involving BBC Worldwide, since it would deflect revenue streams from the BBC to shareholders.

"Nothing is being ruled out but I think we would always prefer something that added value to the company, and that makes a partnership [rather than a flotation] a much more likely outcome," the executive said.

The BBC has drawn criticism from rivals for distorting UK media markets, an argument that has won the sympathy of senior Conservative figures, who look set to take power by the middle of next year.

But the Labour government has also announced that it will cut the BBC's £3.6bn funding - a move the broadcaster has resisted.

"This could be a signal to the Conservatives, showing they are willing to reduce the size of the BBC, but it is also a sign to the current government that if they want to do a deal over the size of the BBC's funding, that is still possible," said the person familiar with the strategy.

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The regulator has proposed that the regulation of services such as the BBC iPlayer should be handled by the Association of Television on Demand (ATVOD) and the Advertising Standards Authority (ASA).

Under revised European law, ‘TV-like’ services must be regulated from 19 December. The Government had handed the responsibility to Ofcom, which now proposes that the two bodies carry out most aspects of regulation on its behalf, although it will oversee the arrangement.

Under the proposals, Ofcom would have ‘back-stop powers’ to intervene if the co-regulatory system didn’t work effectively, and the body will retain the power to impose sanctions against service providers.

ATVOD would be responsible for ensuring programmed adhere to guidelines in the European Directive, which will be set out in UK legislation. Advertising will be overseen by the ASA.

The plans were outlined in a consultation document published by Ofcom today.

The EU’s new Audiovisual Media Services Directive comes into force last December, two years after it was agreed by member states. It replaces the Television Without Frontiers Directive which dated from 1989.

VOD services include the BBC iPlayer, 4oD, ITV Player, SkyPlayer and Demand Five. The channels are available through Virgin Media, BSkyB and BT Vision as well as on the web.

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LONDON: The CC said it was seeking further evidence to help it decide what to do about contract rights renewal (CRR), a complex formula invented to mitigate the monopoly effects of the 2003 merger between Granada and Carlton that formed ITV.

Michael Grade, executive chairman of ITV who is stepping down soon to become non-executive, has been lobbying since taking his job in 2007 for abolition of CRR, or at least substantial relaxation.

However, the Commission’s ruling on Tuesday appeared to come down on the side of advertisers, who had argued in favour of retaining the remedy.

But the Commission said it was considering extending the calculation of audiences to include any catch-up channel, an ITV+1, that ITV might run on its digital offering, and ITV’s high-definition channel.

The Commission said it had found that the continuing ability of ITV1, the main commercial terrestrial channel, “to reach large numbers of viewers, and the strong bargaining position this gives it with media buyers, requires the retention of the CRR undertakings, although some variations might be justified”.

Diana Guy, who led the CRR review, said: “ITV1 has seen a decline in its share of both viewers and advertising revenues since 2003 and there are now more alternatives for advertisers.

“However, ITV remains crucial for advertisers looking to reach large number of viewers, particularly if this needs to be done rapidly.

“The media agencies, through whom the vast majority of TV advertising is bought, need access to ITV1 for their advertiser clients.

“As a result they cannot withdraw all their business from ITV1. However, we found that if they try to reduce their proportion of expenditure on ITV1 they could be faced with significantly less attractive terms for their remaining ITV1 business. Because of this the changes in the market since 2003 have not increased the bargaining strength of agencies. It is therefore our view that a remedy needs to stay in place.”

CRR was invented in 2003 by Carlton and Granada when the two largest Channel 3 franchise holders were seeking to offer remedies to the Office of Fair Trading in return for permission to merge.

The regime gives advertisers the power to refuse any deal offered by ITV if it worsened their position compared with any contract signed in 2003, in effect freezing advertising costs at the level that year. An additional “ratchet” system links ITV’s performance in providing a share of the television audience to advertisers to the amount it can charge for airtime.

In challenging the current rules in 2007, ITV argued that the digital revolution offered so many more television channels that its dominance was undermined. Advertisers said the company still had the power to set prices.

The OFT ruled last May that although ITV1’s market position had declined, “it remains almost the only provider of very large commercial audiences, which are of particular value to some advertisers”.

The OFT advised the Commission to consider changes, and its announcement on Tuesday represents its preliminary ruling. A full decision is expected by the end of the year.

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Ben Bradshaw, the culture secretary, is expected this week to propose lifting a ban on commercial broadcasters and producers receiving payment to include brands in TV programmes.

The changes could come as soon as next year, bringing Britain into line with Europe and the US, where TV product placement is already allowed.

Mr Bradshaw’s predecessor, Andy Burnham, was opposed to any blurring of the line between editorial and commercial, despite pleas from broadcasters and programme makers who are suffering the worst advertising recession for decades. Mr Burnham feared that any relaxation of the rules would weaken broadcasting standards and damage trust between audiences and broadcasters.

The government reiterated its opposition in March, but Mr Bradshaw is expected to announce a change of policy during an address to the Royal Television Society on Wednesday.

It emerged last month that a Conservative government would allow product placement.

People close to Mr Bradshaw said the change in policy reflected his personal desire to minimise the “regulatory burden” on businesses, especially when they were trying to compete internationally. He thought it wrong to deprive commercial broadcasters of “millions of pounds in revenues” at such a difficult time for the industry.

ITV said in a statement that product placement “could be an important new revenue stream”, and a change in policy would be “warmly welcomed”.

“New sources of revenue mean better-funded content, which can only be good news for viewers,” said ITV.

Brands can already pay agencies to provide their products as props for TV shows, but under current rules, broadcasters are not allowed to profit from it.

GroupM, a media agency, has forecast that TV advertising spending will fall 14 per cent to £2.9bn this year.

Peter Bazalgette, former creative chief of production company Endemol , estimates that product placement could generate more than £100m revenue for broadcasters and production companies within three years, based on applying its 5 per cent share of TV advertising in the US to the UK market.

“Even if it’s not all new money, it strengthens the commercial television proposition,” said Mr Bazalgette, because viewers fast-forwarded through commercial breaks or watched shows online.

Ofcom, the communications watchdog, said in a 2005 study that it expected revenues to reach only £25m-£30m after five years.

A Department for Culture, Media and Sport statement said: “Ben Bradshaw has been reviewing policies across the whole of his brief, including on product placement. We will make an announcement as and when a final decision is taken.”

Advertisers and agencies gave only a lukewarm welcome to the news.

“It does represent an opportunity, but I don’t think it’s going to make a huge amount of difference,” said Jim Marshall, media futures group chairman at the Institute of Practitioners in Advertising, which represents agencies.

“If you do it in an over-the-top way, it irritates people, but if you do it in a subtle way, it’s hard to get noticed.”

Mr Marshall said the move was less significant than the Competition Commission’s imminent ruling on contract rights renewal, governing how ITV sold its advertising space.

Ian Twinn, head of public affairs at the Incorporated Society of British Advertisers, said it was unlikely to raise as much as £100m a year.

“Advertisers are not crying out like mad for it,” he said. Product placement required planning well in advance, with little guarantee of audience size or time of broadcast. “It’s a blunderbuss of a technique,” he added.

But Paul Frampton, managing director of the media agency MPG, said it would lend an “everyday reality” to shows such as Coronation Street . “This is just a form of equalisation for TV, which has been in the Dark Ages because of the tight regulation,” he said.

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The NewsCore service will distribute news stories, audio and video within News Corp companies, such as BSkyB, The Times and Fox News, according to MediaGuardian.co.uk.

Based in New York, it will be recruiting for positions in New York, London and Asia.

An internal News Corp document obtained by MediaGuardian read, “When Sky News reports that Gordon Brown has called an election, everyone in the NWS family can run with it. When TG24 learns that Vesuvius has blown its top again, everyone in News Corp will have it. Immediately. And from a source we can trust – us.”

It’s understood a launch date has not been set.

Other News Corp companies, owned by Rupert Murdoch, include The Sun, The Wall Street Journal and MySpace.

News Corp was unavailable for comment.

Factual data only is sourced from the original attributed article. The data is then enhanced by additional research and comment.

The number of persons age 2+ in Hispanic TV homes will also grow with estimates showing a 2.4% increase to a total of 44.3 million. The number of persons 2+ in African American TV homes will increase by 1.3% to 37.5 million, and persons 2+ in Asian TV homes will remain at 14.5 million.

Download the full list of Ethnic DMA rankings and universe estimates.

Factual data only is sourced from the original attributed article. The data is then enhanced by additional research and comment.