Magna Study: No Growth in Advanced TV Ad Sector in 2009

Sector challenged by fragmentation of cable and satellite infrastructure

By John Eggerton -- Broadcasting & Cable, 5/11/2009 12:24:10 PM

Look for no growth in the advanced TV advertising sector in 2009, followed by modest growth after that to a total of $168 million in total advanced TV advertising in 2010.

That is the prediction of media strategist MAGNA in a just-released ad forecast.

Magna includes a host of delivery vehicles under that category banner, including VOD, DVR advertising, interactive program guides, addressable advertising and more.

According to the company, the sector is "challenged" by the balkanization of cable and satellite companies' infrastructure, saying that has led to a "chicken-and-egg" problem of investment awaiting better infrastructure and infrastructure improvements awaiting more investment.

VOD remains the single biggest category of advanced TV advertising at about half of the total, but Magna predicts VOD advertising to fall in 2009 due both to the slumping economy and a combination of other factors including problems with ad insertion and limited availability of premium content.

Magna says that Canoe, the cable industry venture, is a "significant wild card" in its prediction "given varying logistical and political challenges."

Canoe Ventures is the targeted ad initiative launched last year by cable's heaviest hitters -- Comcast, Cox, Time Warner Cable, Bright House Networks, Cablevision and Charter. The company is preparing to launch its first product this month, which it describes as "a Community Addressable Messaging product which allows for the delivery of a different version of an ad to groupings of households (a community) based on third-party, demographic market research."

There has been some concern in Washington about privacy and targeted marketing issues surrounding targeted advertising, but the company said two weeks ago that it is "building products not only to comply with the comprehensive privacy rules that govern the cable industry but also according to best practices in protecting consumer privacy."