INVIDI Aiming For Ubiquitous Addressability Across Set-Top Box Manufacturers Says EVP Kubin

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May 11, 2011 – 8:20 pm

INVIDIMichael Kubin is Executive Vice‑President of INVIDI, which provides set-top box software enabling advanced addressable advertising solutions for cable, satellite, telco and IPTV operators, announced on April 14 that the company had raised $49 million in Series D financing. Read the release.

Michael Kubin is Executive Vice‑President of INVIDI, discussed INVIDI and the addressable TV market.

Click below or scroll down... Why has it taken so long for addressable TV to arrive?

MK: Two reasons. First of all from a technological standpoint, it's hard to do. There's not just one set‑top box, there are literally dozens and dozens of them out there at this point - Motorola, Sony, Cisco, satellite, DVR and the non‑DVR boxes. Also, obviously, the year in which those boxes came out determines the capacity it has in terms of computing power and storage. And so just from a technical standpoint, it is a challenge. That's one.

So if we had a total buy‑in from everybody, all the distributors, satellite companies and cable companies, if we had a complete buy‑in from day one, it would still be a hard thing to get [INVIDI] into all those boxes.

Now we didn't have buy‑in from day one, so we had to go through each one: Verizon, Dish Network, DirecTV, and all the cable companies. And have separate conversations - business and technical conversations - with each company. Each company has a priority. Business guys want one thing, technical guys want another. And it's not a simple problem.

You've got a pretty significant amount of evangelizing that you've got to do in order to get everybody lined up to say yes. And once you do say yes, then and only then do you get a jingle in your pocket and get the whole thing working.

What are some of the more difficult players to deal with here?

Every single company has their own priorities, and in some cases you've got business guys that are running the show and in other cases you've got the technical guys that have a bigger impact. I would not say some players are more difficult than others. Each one presents a very different scenario than the other.

And you're obviously trying to meet the demands and conditions of the advertiser. So first of all, you first want a national footprint, which is why we do deals with DirecTV and Dish.

And then with cable you have to bring systems together on a system‑by‑system basis or an MSO‑by‑MSO basis to create your national footprint. In doing our Motorola deal, since they are the most distributed set‑top box in the cable television industry, we have our software integrated into the firmware of Motorola's set‑top boxes, so that we can [extend] that national footprint.

Can you give a specific use case of where you see your software working today? And then down the road?

First of all, it is being used today by Verizon on a zone basis. So it's not aiming the ultimate capability of the technology, but they are already in use and going to be in broader distribution come the third quarter of this year. So basically what the software does is it allows the advertiser to select the target audience that he's looking for by age, by gender, by ethnicity, by income, by geography. It’s very analogous to direct mail and ho ow you target the audience by eliminating wasted reach.

So there is not an advertiser ‑‑ I don't care who you are ‑‑ there is not an advertiser out there who would not benefit by limiting the reach of their television spots to those people who are in their targeted audience.

What infrastructure partners is INVIDI specifically dependent on?

What we do is provide the software that allows everything else to work. We put in the software so that the advertiser can find the audience he's trying to reach. For example, if you want households of a certain income, households who have dogs for dog food commercials. Households for travel spots for airlines, that sort of thing. That's an overlay from another database - Experian, for example, who is a partner of ours. But it doesn't have to be Experian, it could be the U.S. census or any data source that is publicly viable.

What about getting the consumer to provide you information? Is there potential there as well?

In the current scenario actually there's no ability for the consumer to provide any information. It could be down the road, though.

From a viewing experience [addressability] is great for the consumer because if you don't have a baby in the house, why do you want to watch diaper ads for? If you're a male and living by yourself in a household, why do you want to watch any number of female products or the other way around.

INVIDI just did a big fund‑raising effort. How much does that give you in terms of total fundraising?

Almost $112 million.

Do you feel like you've gotten some traction where you're ready to just move forward on cash flow?  What will these latest funds be used for?

We believe this is the last round. Since we are an engineering company, virtually all of the funds go into engineering.

What part do media agencies have to play in addressable media for TV?

Media agencies are a really important partner of ours. They need to understand what it is that's available through addressability, why their clients benefit from it. They need to essentially proselytize to their clients why it is that they should be doing this. And then they become, I think, our most important customers because they then translate that interest into more sales for us. So, if you look at our list of partners. We've got GroupM as our most important partner and the reason we selected them is because they have this huge amount of input over their clients, who could use our technology. Essentially they sell our technology to their clients.

Also, Starcom is on our Board of Advisors and they are very, very passionate about addressability and they've actually been doing a great job of going out there and talking about why addressability is important to the industry. They're both important for our success.

What would you say about creative agencies in this?

They’re hugely important because once you have the ability to send different creatives to different audiences than the creatives can really use their ability to maximum benefit because they can actually produce commercials that are appropriate to a relevant audience.

Do you see the cross-channel, addressable audience opportunity ahead where marketers address the same person through a PC as when they visit a website?

We're TV-only right now. We might at some point look at other channels. And when I say TV, it's by any form, any means in which a consumer can watch TV. Television, whether it's an iPad, over the Internet - that's what we're involved in. Once we get into that video path, then we can perform our magic. So INVIDI really doesn’t care about where the consumer is getting his source of programming from.

So, in your opinion, is addressable TV more for direct response advertisers or for brand advertisers?

Well, it's interesting because when I first heard about INVIDI in 2003 when I met the current CEO. I thought it was going to be a natural for DR. I thought it was going to be the greatest way for direct response to send spots to interested people and track the activities. In fact, we still think that DRs a huge opportunity, but the more we talk to just brand advertisers the more we realize that they're all over this as well.

Does media have to get into technology now? Do they have to be technology owners?

Technology owners?  No. I don't think they have to be technology owners. But I think understanding technology in today's world is essential for being a media person. It's all about technology.

Anything at a high level that you can share in terms of milestones you’d like INVIDI to achieve in the next few years?

Well, distribution's the key, so by the end of this year we will already have contracts with [the equivalent of over] 40 million homes. But, three years from now, we’d like to be in 150 million homes. We'd like to be in everyone’s home.

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May 11, 2011 – 8:20 pm

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