Advanced Ad Deals Lag Behind Technology

Many key business models for platforms remain fluid

By George Winslow -- Broadcasting & Cable, 2/20/2012 12:01:00 AM

While Deployments of advanced advertising technologies have become more widespread, one of the key factors holding back these platforms remains the lack of agreement on key business models.

For starters, a number of programmers still need to ink deals with operators detailing how the revenue and ad avails might be split up. As a result, the number of networks participating in initial deployments of dynamic VOD or interactive advertising platforms remains relatively limited.

Currently, NBC Universal networks USA, E!, Syfy, Bravo and Oxygen, as well as some niche and local content providers, are participating in Comcast’s dynamic VOD insertion deployments.

“We have a lot of programming deals that were cut a long time before VOD advertising came into its own. To achieve scale, we have to go back and engage with programmers to account for the fact that advertising is a possibility,” says Marcien Jenckes, Comcast senior VP/ general manager of video services.

Likewise, Canoe Ventures has eight networks currently participating in its request for information (RFI) interactive ad products. Canoe, which is owned by six major MSOs, expects several more networks to be added soon.

Programmers also continue to experiment with different ad loads and approaches. For example, the fast-forward button is disabled on Comcast’s VOD platform for ABC, Fox and NBC programming, but not for CBS.

The right ad loads for VOD are another question mark. A number of programmers are using the same ad load as their linear feeds so the viewing is counted as part of Nielsen’s C3 ratings. But others have adopted a lighter ad load, and there are a variety of approaches to the load after the first seven days of airing on the VOD platform.

Comcast has, however, been able to us its dynamic VOD ad insertion platform from Black- Arrow to offer programmers several options for ad insertion. “Our system allows network to insert whatever ads will best monetize the content at that point in time,” says Jenckes.

Early research into both dynamic insertion of VOD ads and interactive ads is also showing their effectiveness, brand awareness, ad recall and purchasing intent.

“For advertisers looking for a return on their investment, it produces measurable results,” says Arthur Orduna, chief product officer at Canoe.

But Comcast has been exploring the creation of additional measurement tools. “We think it is important to create an audience currency,” Jenckes says.