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The BBC looks all set to introduce “low-key” advertising on its BBC Worldwide websites within a year, with a final decision on the matter due in the autumn after a further round of consumer research.

The announcement was made yesterday, when BBC Worldwide announced annual profits of almost £90m, up by around two-thirds on the previous year.

The idea, it seems, is for the BBC to monetise its global audience, rather than relying on licence fees to pay for the costs of bandwidth. It is currently evaluating geo-targeting tools to help identify overseas visitors.

The bbc.co.uk website attracts about one billion page impressions a month from countries outside the UK. About a third of visits originate in the US, where publishers are concerned at a possible dwindling of ad revenues as advertisers migrate budgets towards the BBC.

However, BBC Worldwide chief executive John Smith anticipates “no material impact” on their activities, based on the size of the global online advertising market, which may surpass the £10bn mark this year.

Smith also said the BBC has no plans to allow banner advertising or pop-ups, instead opting for ads within the story content, most likely in-line rectangles.

The Guardian quotes him as saying: “It would be a limited number of ads. And it will not be totally commercial in that it will not be invasive. The basic notion is to have specific advertising to meet commercial return criteria but not so much that we are changing the nature of the site."

Of course if you’re charging for advertising, then it is commercial. Exactly ‘how commercial’ it is doesn’t really matter.

Now for the maths...

Let’s assume the BBC can sell an average of one ad per page, on a low blind-network buying rate of 50p CPM. That works out at about £500,000 per month. And hey, there’s almost zero chance of being able to buy ads on such a popular website for that sort of money.

Maybe £5 CPM is more likely (or maybe this is still too cheap!). At that rate, the BBC Worldwide would generate an additional £60m a year in revenue.

£50 CPM, anybody? Licence fee rebates all round...

Chris Lake

Published 29 June, 2006 by Chris Lake

Chris Lake is CEO at EmpiricalProof, and former Director of Content at Econsultancy. Follow him on Twitter, Google+ or connect via Linkedin.

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