VOD Ads Ready – Theoretically; The TV Everywhere Future

Email This Post Email This Post
February 13, 2012 – 12:03 am

TV VOD AdsHere's today's TVexchanger.com news round-up... Want it by email? Sign-up here.

VOD Ads Are Ready For Primetime --Theoretically

Over the past few years, the TV ad business has waited patiently for various tech providers and industry consortiums to come up with robust systems for targeted ads through set-top boxes and video-on-demand ad insertion. To be sure, advances have been made, here and there, and every once in a while, there's a demonstration of some new initiative that promises to crack the code.

It's hard to say if we've actually reached that moment that will make addressable ads and VOD insertion more than just an experiment. But it's beginning to look that way.

This past week, CableLabs, the R&D consortium formed in 1988 and backed by the major MSOs, held its interoperability meeting in Louisville, KY, and offered an update of what it and its tech vendor partners have achieved lately, particularly in the area of dynamic ad insertion, which allows ads to can be swapped in and out at will during a TV program as it's delivered to viewers homes. The problem with dynamic ad insertion is managing all the various media formats and systems that bring video to cable subscribers' sets.

  • Ad Decision Managers (ADMs) and Ad Decision Servers (ADS), the tools that run ads dynamic ad insertion systems, were able to identify ad placement opportunities within a VOD listing and dynamically place the most relevant ad in either a pre-roll, mid-roll or post-roll location, something that is common for online but still unusual for TV.
  • Placement opportunity, content and subscriber information systems were involved to select the most relevant ad to be played out to the specific subscriber.
  • Using multiple ad decision servers and a decision router, ads were dynamically placed from national, regional, or local inventories as defined by the placement opportunity information.

The main hurdle has always been getting all the TV systems to agree to a single platform. The solution in achieving these steps involved the use of SCTE 130 interface standards, which supports advanced advertising for traditional live TV, VOD and DVR platforms, and, most importantly, allows for narrow levels of targeted TV advertising. Read more in the release.

It helped that CableLabs had all the major tech players lined up as participants: Canoe Ventures, the other cable industry consortium that demonstrated its national VOD Dynamic Ad Insertion platform, along with independent tech companies BlackArrow, Avail-TVN, Harris Corp., Nagra-OpenTV, SeaChange and This Technology.

Bridging national and local: Of those companies, BlackArrow, which has received financial backing from Time Warner Cable in the past, previewed its own recent advancements in addressable TV. The big news: it has crossed the national and local divide.

The problems in crafting a seamless platform for national and local advertising has vexed cable operators for years. The problem is that the major MSOs' systems represent a patchwork of smaller operators that were acquired over the past two decades. Though subscribers in various parts of the country may pay their monthly bills to the same brand, that doesn't mean those viewers are otherwise connected in a way that makes it easy to serve ads. Read BlackArrow's release.

It all gets very technical – who would have known that ad sellers and buyers would ever need an advanced degree to understand their business – but BlackArrow essentially credits the acceptance of the SCTE 130 standard that in essence detangles all the various cable wires and allows the different systems to speak the same language.

So does this mean a switch will be flipped and we'll be seeing regular use of VOD ad insertion and national/local targeted cable ads? Not necessarily. But the groundwork has clearly been laid down. Getting the agreement on a standard platform is one thing. Getting the advertisers to start paying for it is another.

Ad Dollars Everywhere?

As studies have indicated, one day soon, TV viewers will need a third hand: one to hold the remote, one to hold their smartphone and another to hold their tablet. That's what AT&T is getting ready for with its "TV Everywhere" iPad app offering for its IPTV U-Verse product (Read the release and see a video demo here.)

So far, TV Everywhere apps that extend video to smartphones and tablets haven't had any impact on advertising yet. But over time, they almost certainly will provide additional outlets for targeted ads and a way to get users to opt-in for more information. But before that can happen, these apps need to be available on more devices.

As we've shown above, CableLabs appears to have made some progress on addressable TV standards. The R&D consortium has also been working on extending those standards to tablet devices run by Apple's iOS and Google Android.

The expectations for TV Everywhere is that the complete rollout will occur over the next 3- to 5 years, reports MediaSalesToday, citing Laura Martin, a Needham and Co. analyst. The total U.S. "TV ecosystem" is currently worth about $330 billion, Martin estimates, suggesting that TV Everywhere could increase that amount by an incremental $24-$48 billion.

But that is still not assured. There have been questions raised about whether video streaming is additive to regular TV viewing, or if it cannibalizes it. If it looks that way, it's because TV Everywhere coverage tends to be limited to certain devices – like the iPad – as opposed to across devices universally. That tends to lead to a bifurcation in viewing, as users spilt into separate camps of "video streamers" and "traditional TV watchers."

But as TV Everywhere coverage becomes more complete, that will either mean one video world. But given the bureaucratic slowness associated with updating licensing agreements among the various parties, the concept's growth is not necessarily set in stone.

Social TV Ad Model Emerges?

In addition to waiting for advertising to be extended to the TV Everywhere concept, social TV apps also brims with potential, but not a lot of ad activity. But it is showing demonstrable signs of progress, if not actual substance.

Although entertainment check-in app GetGlue, which recently scored $12 million in funding and surpassed 2 million users, is not focused on generating ad revenue at this point, Bloomberg's Steve Cooper reported that advertisers and non-ad channels like HBO are becoming more interested in the added promotional value the app provides. But so far, no real ad revenue is being delivered.

GetGlue CEO Alex Iskold told paidContent's Daniel Frankel that the app needs to grow its current user base to more than 20 million to be considered scalable enough for advertisers.

Meanwhile, TBS hopes that the promotional lift that social TV can produce will do something to raise the profile of its struggling late night star, Conan O'Brien. Adweek's Mike Shields writes that the Turner entertainment is instead creating its own Conan-branded app, rather than rely on existing apps like GetGlue. The app uses audio identification like Yahoo's IntoNow or Shazam to check in viewers.

AT&T is the initial sponsor, though it's not clear how much it's spending, though it probably isn't much.

TV Everywhere and social TV are two areas that will be accompanied by the phrase "early days" for the next few years. Networks and cable and satellite operators are still learning about the way these added features affect viewing habits and brand awareness. Either way, it's all part of a larger continuum that has traditional TV watching and advertising embracing the parameters long-associated with online content distribution and marketing support.

In his Conan piece, Shields outlines the potential downsides of TV's increasing resemblance to the online world: "There's little question that social TV as well as companion tablet viewing are taking off among consumers. However, it remains to be seen how many Americans are ready, or even know about the promise of connected TVs. And there's also the risk of couponing TV viewers to death—and turning the ultimate branding vehicle into a banner ad-filled direct-response medium."

That's a reasonable argument. But TV is still very different from print, which has found itself severely cannibalized by the web's infinite inventory. While any number of ads can be placed on a website, leveling the playing field between relative newcomers like the Huffington Post and established publications like the New York Times, TV's ad inventory scarcity is safer than print's, because unlike searching for web topics, premium TV shows are more unique than news articles. Plus, there is only so much inventory available for a half-hour show watched by authenticated viewers. The closest thing to authentication that newspapers have is a paywall. And that tends to keep users out, rather than inviting them in to consume, as TV Everywhere and social TV apps do.

But Wait! There's More.

By David Kaplan

Email This Post Email This Post
February 13, 2012 – 12:03 am

Post a Comment

Sign Up for the TVexchanger.com
Daily Newsletter