Finally, The Year of the VOD Ad

Technology advances in on-demand platforms are expected to usher in a major leap forward in revenue come 2014

Why This Matters

Opening New Windows Through VOD

While much of VOD dynamic ad insertion is focused on post-C3 windows, Comcast and others are actively exploring a number of other options to better monetize on-demand platforms.

Following a major push by Comcast to expand the amount of popular TV content on its VOD platforms in recent years, the MSO has seen a major uptick in usage (a 40% jump between 2011 and 2013) that in turn is making the platform increasingly attractive to advertisers, reports Matthew Strauss, senior VP of digital and emerging platforms for Comcast Cable.

Strauss argues that increased VOD usage is also boosting live viewing because viewers find it easier to catch up on episodes they have missed. Following a heavy promotion of NBC’s The Blacklist being available ondemand, Strauss adds that the live commercial ratings in Comcast homes were 16% higher than in non-Comcast homes and there was a 98% increase in VOD and DVR viewing.

Comcast is also increasingly acquiring rights to full seasons of episodes for shows and has been experimenting with programmers on inserting the C3 ads being used for the current episodes into all of the episodes for an “on-demand commercial rating” that would give programmers credit for catch-up viewing. “We are trying to empower programmers with a number of ways to better monetize the content,” Strauss says. —GW | @GeorgeWinslow

After nearly a decade of delays, video-on-demand advanced advertising
has finally reached the enviable state where discussion of the subject revolves around real deployments instead of
predictions for when programmers and operators
will finally start using the technologies.

VOD dynamic advertising insertion (DAI)
systems have already been fully deployed
across all the Comcast Cable systems, and
deployments are well advanced among
other major operators and programmers. “In terms
of MSOs, we are up to 29 million homes in the top
10 DMAs,” or designated market areas, says Chris
Pizzurro, head of sales and marketing at consortium
Canoe Ventures, which is backed by Comcast, Time
Warner Cable and Cox. “We did an average of 55
campaigns per week in the month of September.”

 Why This Matters
As on-demand viewing rises, programmers are looking for better ways to monetize VOD usage.

Nick Troiano, president of Black Arrow, which provides
advertising technologies to major operators,
notes the company expects some 65 networks to be
using their technologies over the next year and that
the footprint for DAI efforts should hit
40 million by the end of 2014.

For the moment, much of the focus
is on expanding the footprint of DAI
services and their potential for better
monetizing VOD viewing after the C3
ratings window (the first three days after
broadcast). But operators, vendors and programmers
are also looking at how these ads might help advertising
with the traditional C3 window, more targeted
advertising solutions and technologies that might help
unify VOD ad delivery with the multiplatform TV Everywhere
offerings of live and on-demand content.

The Other 78%

Much of the early attention is on the post-C3
window, with programmers inserting new ads on
day four so that they can get some revenue from
the 78% of VOD viewing that occurs past the C3
window, Pizzurro says. “It is the low-hanging fruit
in VOD because there are so many impressions that
aren’t being monetized,” he says.

Some of the biggest pushes in this area are expected
in early 2014. For example, Fox tested DAI over
the summer and is planning a full rollout in January.

Toby Byrne, president of advertising sales at Fox
Broadcasting and Fox Sports Media Group, stresses
that VOD advertising deployments have a number of
advantages because viewers are more engaged and
the fast-forward feature is disabled.

“Dynamic ad insertion is our viable solution to
utilize impressions beyond the three-day window
with ads that are current,” Byrne says.

Ads Everywhere

Time Warner Cable will also be ramping up its advanced
advertising efforts in 2014, reports Joan Gillman,
executive VP and COO of Time Warner Cable
Media. They will be expanding their recently deployed
TWC Media Ads Everywhere, which allows ads to be
dynamically inserted into live programming from more
than 50 cable networks available on tablets via the
TWC TV app and their VOD sales efforts. “We are very
excited about the advanced advertising opportunities
as we start to scale them up in 2014,” Gillman says.

Further down the road, vendors are also working
to deploy technologies to better tie together ad
systems for linear, VOD and the digital delivery of
content as part of TV Everywhere offerings. “All of
those systems developed as silos with different technologies,”
says Andrew Rowe, head of multiscreen
TV solutions for the Americas at Ericsson, which will
be awarded an Emmy this year for its work on VOD
advertising. “But one of the long-term keys to success
will be to try it all together in a way that can
serve customers more relevant ads.”

This will, however, require a great deal of integration
between various systems. “The challenge is that
there are a number of processes that touch the ad before
it is delivered, and that introduces risk that something
might go wrong,” says Duncan Potter, chief marketing
officer at SeaWell Networks, which has been
deploying solutions to overcome this particular issue.

Operators are also eyeing systems for delivering advertising
that can be finely targeted to specific demos
once VOD advertising becomes more popular. “The
focus has been on maximizing the reach of dynamic
ad insertion. But once it takes off and there is money
flowing through the system, the next wave of VOD
will be targeted advertising,” says Aseem Bakshi, general
manager of advertising at SeaChange.