July 10, 2007
- Top Story: Throwing Advertising’s New Switch
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Great Ideas
- Who’s Watching Commercials
- A Perfectly Pithy Pitch
- Cable’s Quest for Commonality
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Briefing Room
- Why Cable Nets Are Accepting Commercial Ratings
- USA Tops Q2 Ratings Charts
- Forecaster TNS Reduces ’07 Ad-Spend Estimate
- Cable Summer Series Blast Past Broadcast
Networks
- VOD Advertising Model Not Ready Yet
- Lifetime Original’s a Surprise Summer Ratings Hit
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- People
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Switched Digital: Advertising’s Future?
A technology originally conceived to make more efficient use of cable bandwidth is emerging as a center point of conversation surrounding new advertising-delivery possibilities.
Switched-digital video (SDV) departs sharply from cable’s traditional approach of delivering a batch of channels at the same time to every subscriber, and letting the subscriber tune in to one of them at a time--blithely ignoring the rest. Instead, SDV contemplates an all-digital world where only the one channel requested by a customer gets sent down the pipe from the headend. That way, hundreds of unwatched channels aren’t clogging the pathway to the customer’s home. As bandwidth-engulfing services like high-definition TV advance, SDV presents a way to more efficiently allocate available bandwidth--one reason why Time Warner Cable, Comcast and others are beginning to invest seriously in the technology.
But as last month’s Society of Cable Telecommunications Engineers conference demonstrated, SDV also is of keen interest to advertising strategists. That’s because the technology offers an interesting tableau for addressable advertising. With each viewing stream existing as an independent event directed to a unique household, it’s possible that cable companies could insert highly targeted ads within individual channel requests. That way, a cable company could deliver “different ads for the same TV channel in different homes,” said David Woodle, the chairman and CEO of digital ad systems provider C-Cor Inc., at the conference.
The SDV-advertising possibilities represent an exponentially larger version of video-on-demand advertising, which so far has been generally confined to selected programs available from VOD program menus. If SDV proliferates, it could create an environment where entire channels--hundreds of them--are available for household-targeted advertising insertion.
But some believe SDV’s impact on advertising will be limited, at least in early deployments. One reason: It’s possible MSOs will elect to “switch” only a subset of channels, and in particular those that have less advertiser appeal. “The purpose of switched broadcasting is to move into a narrowcast mode the stuff with low ratings--which is the last place you need ad insertion,” said Gary Lauder, an investor with interests in several cable technology companies including ICTV Inc.
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Rotating the rotation, getting a quick “yes” and building the next-gen ad platform
Isolate the commercial: One important byproduct of emerging technology schemes tied to video-on-demand advertising is the ability to see how viewers are (or aren’t) interacting with individual commercials. In trials it has supported, the VOD-advertising software provider Atlas On Demand has seen stark differences in the prevalence of fast-forwarding related to certain commercials. By evaluating those findings, cable advertisers can get a sense of which commercials seem to be capturing the most attention, and they can adjust their copy rotations accordingly. “Let’s say ad A works better than ad B. They can weight it accordingly,” says SVP Scott Ferris. “It’s direct feedback of the exact viewership of the ad as a
separate asset.”
Evoke the affirmative: Need to get a prospect interested when there isn’t time for a full-blown pitch? Lead the conversation with a question that’s bound to elicit a “yes” answer, advises Louis Lautman, the president of Miami Beach, Fla., sales training company International Sales University. She told Sales & Marketing Management Magazine that salespeople can break the ice quickly by posing a brief question prospects will answer to in the affirmative–followed by a quick statement of a solution that arouses curiosity but is short on detail. That makes it more likely the prospect will agree to a follow-up meeting to get the whole story.
Come together: Making a big business out of advanced advertising over cable means coming to a consensus on a set of definitions and business processes--not developing some omnibus technology platform every participant uses. That’s the perspective of Comcast Spotlight VP of technology Paul Woidke, who says the idea of a homogenous technology architecture supporting advanced advertising is the wrong concept. Instead, Woidke believes the key is to rally around basic technology standards coupled with shared adoption of terminology and basic business processes. That way, a “voting and polling” application, for instance, can be understood and embraced by advertisers across multiple markets in the same way a linear TV “avail” is understood today.
Woidke says it’s important to communicate to advertisers that the cable advertising industry is working to unify basic ad insertion and measurement concepts, but isn’t trying to come up with some sort of centralized national clearinghouse for advanced advertising. “Nobody should expect that this platform means complete and total homogeneity,” he says.
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Tim Hanlon, SVP, Denuo
As the head of Publicis Groupe’s new-media initiative, Denuo, Tim Hanlon uses his bully pulpit to cajole, pressure and encourage cable providers to get their interactive advertising house in order. Recently, he’s seen signs of urgency on the part of the cable industry to do just that.
Q: How does the state of cable’s interactive advertising progression look to you right now?
A: I sense that there’s a newfound interest in solving the advertising equation--literally over the last couple of months, especially from the cable community. I can’t speak as to why all of the sudden. But from the highest levels I’m hearing expressions of great interest in advertising as being strategically important.
Q: What’s prompting that interest?
A: My sense is that one of the things that’s starting to drive some of this, maybe indirectly, is this looming digital transition in 2009, and the recognition that TV stations will have lots more capacity to do things, and that maybe in partnership with established cable operators, [they] could do some very interesting things.
Q: You’ve talked before about a broadening of the video-delivery environment. What does that mean?
A: I think it behooves cable operators to recognize, just as any other network operators, that distribution is becoming a commodity, meaning that it’s no longer a monopolistic or oligopolistic enterprise anymore. There’s no shortage of ways to get content and advertising from point A to point B anymore.
Q: So where does cable fit in from an advertising standpoint?
A: The key for addressable advertising to flourish is not to sell more local avails that have that capability. It’s literally to enable the national avails for the branded content networks that advertisers love, like ESPN and A&E, with addressability.
Q: How would that appeal to cable operators economically?
A: A facilitation play could easily drive a substantial revenue stream of shared advertising revenue from national advertisers to the bottom lines of cable operators, if they were to offer to national advertisers all the bells and whistles they’re offering to local advertisers. It’s an order of magnitude higher than local advertising revenues. It’s almost like an annuity: You can still focus your efforts on local ad sales, but now you’ve got this revenue stream for simply facilitating local advertisers.
Q: Are you suggesting cable companies reduce their focus on selling local advertising?
A: A Local advertising is still a very big opportunity. I clearly recognize the bread and butter of the business has been selling advertising. All I’m saying is that national advertising facilitation, if done correctly, could be similarly remunerative and attractive economically, and even of a higher quality because it’s free cash flow.
--Interviewed by Stewart Schley
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Cable Networks Weathering New Audience-Measurement Metrics
(Excerpted from an article in the July 9 issue of Broadcasting & Cable)
The brave new world of shifting metrics hasn't prevented cable networks from posting healthy CPM (cost-per-thousand-viewer) increases in the quickly concluding upfront season. TBS and TNT, which expect to finish writing deals this week, saw increases of approximately 11% while Cartoon Network posted high-single-digit CPM pops.
Also logging increases were A&E (high single digits) and Lifetime (high single to low double digits); the latter opened its selling season with a multi-platform $70 million pact with Group M.
For More…USA Network, Down Slightly, Tops Q2 Cable Ratings
(Excerpted from an article in the July 3 issue of Multichannel News)
USA Network, with a boost from The Starter Wife and wrestling, posted a 2.1 household rating, down 5% from a 2.2 for the same period last year, according to a Disney ABC Cable Networks analysis of Nielsen Media Research data. Following close behind was Disney Channel with a 2.0, which slipped 5% from last year. The June 24 episode of Hannah Montana was the third-highest-rated program in all of basic cable in the second quarter.
For More…Ad Forecaster Reduces Estimate for ’07 Spending
(Excerpted from an article in the July 9 issue of Broadcasting & Cable)
U.S. advertising will climb 1.7% in 2007, reaching over $152 billion. That’s from TNS Media Intelligence, a downgraded forecast from TNS’ call for a 2.6% bump in January. The first half of 2007 is expected to rise 1.2%, and the second half 2.3%.
For More…Cable Series Earn “A” Grades in Summer Ratings Report Card
(Excerpted from an article in the June 25 issue of Broadcasting & Cable)
Cable networks are already well into an ambitious new season of original programming—and another summer of kicking sand in broadcast networks’ faces. In the first three weeks of June, cable shows broke several ratings records, averaging 62.2% of the audience in primetime, up from 61.1% for the same period last year, to broadcast's 29.7%, down from 33.0% last year.
For More…VOD Advertising Model Remains a Work in Progress
(Excerpted from an article in the June 25 issue of Multichannel News)
For Cox Communications and other operators, the on-demand enterprise is an evolving business requiring some model building. “It’s taking time to develop and to manage the economic model, which to date has been supported by the advertising model,” said Cox senior vice president of programming Bob Wilson. “We're still figuring out that model and how to monetize content in VOD. Clearly, it’s an evolutionary business.”
For More…Lifetime’s Wives Deliver a Surprise Ratings Hit
(Excerpted from an article in the July 3 issue of Multichannel News)
Cable’s biggest surprise this summer has been Lifetime's military drama Army Wives. Through five episodes, the series is the network's most-successful ever, averaging a 3.0 rating and 3.7 million viewers since its debut June 3. In fact, the series was the first major network-cable drama in five years to increase its audience in week four (3.1 rating) compared with week one (2.9 rating).
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The Wall Street Journal (subscription) attributes MTV Networks Inc.’s adoption of a new ratings system for commercial airings to a broader industry reality. “The industry’s widespread acceptance of the data reflects pressures on TV networks to slow the flow of ad dollars from television to the Web,” writes the Journal’s Stephanie Kang.
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TheStreet.com says the broadcast television industry’s adoption of audience ratings for commercial minutes transformed the recent upfront selling season, with networks including ABC reaping unexpected gains.
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The Hollywood Reporter looks at the upfront impact of new commercial-ratings and “live-plus-three” audience metrics from a cable standpoint. Paul Gough also examines a decision by Turner Broadcasting to offer sole sponsorships--and fewer commercials--for prime time movies.
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Variety adds new thoughts on Nielsen’s “C3” (live commercial ratings plus three days encompassing DVR playback) measurement metric, saying a Magna Global study indicates a deeper falloff between program ratings and commercial ratings on cable networks than on broadcast networks.
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The Pittsburgh Post-Gazette says a video game featuring a Burger King mascot and an online contest inviting people to submit commercials for Heinz ketchup signify a new era in which advertisers are pursuing consumer “engagement” more vigorously. The comments from Pittsburgh-area ad agencies are worth reading.
For More…
Fast Company applauds Comcast’s recent agreement to enlist Yahoo Inc. to sell ads on Comcast’s consumer Web portal, a deal that’s projected to deliver $1 billion in revenue over the next six years.
For More…
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At Comcast Network Advertising Sales: Nick Gorzkowski promoted to online account executive for the marketing solutions and interactive media from sales planner. New as account executives: Samantha Hyatt, Los Angeles, formerly a Netflix account executive; and Alicia Driskill, Chicago, formerly strategy supervisor at OMD Digital..
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