Programmatic video company Cedato has introduced an engagement-driven ad format called IntentView.

IntentView appears in a video stream as a picture-in-picture overlay with a dynamic video thumbnail preview of the ad message. When activated by the viewer, the thumbnail expands into a full-view video ad with the sound on.

Thumbnails that are not engaged disappear after several seconds.

Related: Programmatic Key to Higher Sales

Cedato said customers have seen a 50% to 90% lift in completion rates using IntentView compared with standard video ads.

“IntentView provides better video engagement metrics because it is user-initiated, and the net branding effect is far greater than in-stream,” said Yair Miranda, COO, Cedato. “By giving users a choice, providing marketers with more genuine and accurate metrics, and guaranteeing publishers additional revenue, IntentView succeeds in delivering better performance without compromising user experience.”

Related: CMOs Say Digital Marketing Is Most Effective: Nielsen Study

With IntentView, marketers pay only for views when a user activates the full-view video ad.

IntentView is an added-value benefit of Cedato’s Video Technology Stack, which powers more than 15 billion video impressions monthly across mobile, web and connected TV. Cedato’s proprietary hybrid video header bidding technology offers video optimization with machine learning algorithms that predict the optimal demand source per impression, the company said.

Google continues to place ads on websites that promote false information, despite saying it wouldn't, according to the Campaign for Accountability (CFA).

Google suggested CFA is the one putting out false information.

CFA said that based on a study it conducted and has just released, Google "continues to partner with hyper-partisan sites that often post inaccurate information, and permits publishers to conceal their identities from advertisers so the company can continue to place ads on these anonymous websites."

The group said that the anonymous publishers contributed eight times as much revenue per publisher than non-anonymized publishers. The Oracle-backed CFA said that Google earned $48.8 million from the right-wing sites in the study, which it said were often responsible for publishing "highly misleading" content, or 68% of the revenue from the sites in the sample, compared with getting only 4% of revenue from the left-wing sites in the sample.

That was based on analyzing 1,255 "partisan" news sites, among which CFA said 184 hid their names.

"This 'report' is completely inaccurate," said Google spokesperson Suzanne Blackburn. "A large number of the sites included in the 'research' are major publishers, such as the Washington Post, Fox News, Politico and the L.A. Times, while hundreds of others don’t even run ads by Google. We have extensive policies that restrict publishers in our ad network from misleading, misrepresenting and deceiving users and advertisers — we enforce these policies vigorously. This is just another example of Oracle’s discredited 'Campaign for Accountability' throwing mud at us because of their lawsuit against Android."

As to the sites being anonymous, a Google source said on background that sometimes publishers will be anonymous in ad exchanges to avoid channel conflict, but that "anonymous" does not mean they are anonymous to Google or enforcement. Advertisers can also choose to prevent their ads from appearing on anonymous sites if they choose.

Almost half of the growth in local video ad spending during the next five years will go to digital platforms, including local mobile video, local online video and out-of-home video, according to a new study on advanced television advertising published last week by BIA/Kelsey industry analysts.

The growth in digital platform advertising approximately matches the expected growth in local cable TV advertising during the period, the report, "Advanced TV: Industry Views on Progress & New Directions," concluded.

BIA/Kelsey's local ad forecast, compiled during July research, envisions $7.1 billion growth in local cable ad spending next year compared with $5 billion for local online, mobile and out-of-home video spending. In 2021, local cable ad growth will amount to $6.9 billion, while the combined local digital platforms will tally $6.7 billion.

The report -- the fifth in the company's series analyzing local digital video advertising platforms -- predicts that by 2021, local digital "ad activation" will represent 43.6% of local ad spending versus 56.4% for "traditional" video media. That's a significant jump from today's 33.2%/66.8% split.

In dollar terms, the study predicts that all local linear TV and digital video combined platforms will grow from $31.9 billion in 2017 to $37.3 billion by 2021. The broadcast TV segment will grow $2.7 billion and the cable/MVPD segment will grow by $200 million (see chart).

"We are seeing very interesting innovation in cross-platform solutions, audience targeting, local data management platforms and a drive toward more accountability in media campaigns," according to the BIA/K analysis. "These innovations may bend current trend lines in the media mix if linear video can become competitive."

BIA/K's report focuses on the increased use of data-enhanced audience targeting via addressable, contextual audience networks, over-the-top, connected TV and programmatic TV platforms, all of which the company said "continue to innovate, and bring change in the national and local TV markets through technology, data, and new forms of automation and efficiency."

The report includes extended interviews with six media and technology executives, including Steve Silvestri, vice president of advanced advertising at Discovery Communications; he oversees the 18-month-old Discovery Engage platform that leverages custom and syndicated data segments for the company's networks.

"The [Engage] platform has consistently showcased its ability to mine high value programs across the Discovery portfolio that may have been previously unconsidered, but now afforded through selling title optimization," Silvestri explained. "Most of our advertisers are purchasing audiences deeper across our portfolio and expanding their network consideration set."

He said that while a "traditional buy" might include four to six networks, an "Engage buy can run to eight or nine networks."

"Through test and control anonymized ad exposure analysis, Engage has proven out lift metrics using transactional data, foot traffic rates and brand surveys," Silvestri added.

The other organizations cited in the BIA/K report are AudienceXpress, Discovery, FreeWheel, Sinclair Broadcast Group, TiVo and Tremor Video.

"As marketers and agencies want more cross-platform campaign planning, activation and evaluation, these tech stacks and business processes must work better together," said Rick Ducey, managing director, BIA/Kelsey and a principal author of the report. "Capital investment, innovation and change is coming to the local TV marketplace," he added citing the perceived values of data-driven audience targeting and advanced TV solutions.

Ducey also pointed out that "advanced TV" has moved beyond its earlier focus on "interactive TV applications" and "addressably-delivered" ads, in which a commercial was delivered to a pre-designated, targeted household. He characterized advanced TV as now comprising "data-enhanced audience targeting via addressable, contextual audience networks, OTT, connected TV and programmatic TV platforms."

The BIA/K report cites "new forms of automation and efficiency" as the key components of Advanced TV, including include platforms, workflow and data.

With no Olympic Games airing this summer, national TV ad spending was down 27% in August, according to the latest figures from Standard Media Index.

Spending on broadcast was down 54% in the month. Of the TV ad spending on the Olympics last year, 92% went to broadcast with only 8% going to cable. Still, cable ad spending was down 1% for the month, according to SMI.

On cable, ESPN was up 27% from a year ago, with the sports leader airing NFL preseason games and more of the U.S. Open Tennis Championships taking place in August. ESPN also got higher rates for Major League Baseball games.

Other cable networks showing gains included Discovery Channel, jumping 16%; Food Network, taking a 10% bigger bite; TBS, up 5%; and HGTV, edging up 1.5%.

SMI said ad revenue at the cable news networks continued to grow, but at less intense rate. Fox News Channel, MSNBC and CNN as a group were up 6%, but for the first time this year, Fox News was down, taking in 2.5% less than a year ago. MSNBC was up a whopping 26% and CNN was up 8%.CNN was up 8% and MSNBC.

So far this year, the cable news networks are up 19%, with MSNBC up 41%, CNN up 18% and Fox News up 15%. SMI noted that MSNBC started the year with the lowest average commercial prices, creating the opportunity for a steeper percentage gain.

Related > TV News Titans: The 10 Names to Know

Among the Big 3 broadcasters, NBC, which aired the Rio games a year ago, was down 82% in August ad revenue. With the NFL season starting and no Olympic competition, CBS was up 17% and Fox was up 14%. ABC was down 1%.

Among the Spanish-language broadcast networks, Univision was up 3%, while Telemundo, which aired the Olympics in Spanish, was down 7%.

Strong performers in the month included ABC’s The Bachelorette. The price for spots on the reality show was up 50% to $131,000 from a year ago and the series brought in nearly 80% more revenue. The summer run of Saturday Night Live fetched $124,000 per spot.

The total ad market was down 7% in August compared with a year ago when the Olympics were going on. So far in 2017, ad spending is up 2.4%, compared with the first eight months of 2016.

Despite the lack of the games, digital was up 12%.

“The Olympics in August 2016 make meaningful year-on-year comparisons tricky, but our data did show some insights that are worth focusing on," said James Fennessy, CEO of Standard Media Index. "The overall market is up 2.4% on a year-to-date basis, with only a 4% year-to-date loss on TV, which shows that a lot of Olympics dollars had been redirected into the Games from existing budgets.

“And, while the digital market has started to recover from the brand safety concerns earlier this year, there is no doubt that growth has been impacted and publishers like YouTube are looking at more modest growth in the 10% region for the current quarter," Fennessy added.

National TV ad revenue rose 2.5% in July, thanks largely to gains in sports on cable, according to new figures from research company Standard Media Index.

Cable news and broadcast primetime entertainment also posted increases.

Cable networks registered a 3.7% rise in ad revenue with sports programming up 30% in July. Broadcast ad revenue was up 0.3%

Much of the cable gain came from the Wimbledon tennis tournament, which aired on ESPN and ESPN2 entirely in July. Last year, four days of Wimbledon were played in June. ESPN also aired the X Games in July after they were played in June last year. The network got a bump from a 12% increase in commercial unit prices on its sports talk shows.

Related: ESPN Fits Mobile App With ‘Watch’ Tab

Cable news networks were also strong, with an 11% increase across Fox News Channel, CNN and MSNBC. Of those, MSNBC saw the largest gain, up 33%, followed by CNN (up 10%) and FNC (up 5%).

Spending on broadcast sports was down 13% compared witha year ago, when the Olympic trials brought more than $20 million in spending to NBC. The broadcasters were also hurt by the PGA Championship returning to August; it was moved to July last year because of the Olympics.

Related: NBC Sports Rebrands Comcast RSNs

Overall ad spending in July rose 12%.

Digital returned to strong growth with an 18% gain. But SMI said one large advertiser, Unilever, which announced it will shift spending from digital to TV, spent 15% more on cable and broadcast than a year ago.

Digital video grew 12%, with premium video showing big gains. Hulu was up 37%, while YouTube was down 15%. Some advertisers have pulled advertising from YouTube because of concern ads might run alongside inappropriate content. TV network digital was up 11%.

“Despite national TV ratings challenges, the ad market opened the second half of the year with a real bang,” said James Fennessy, CEO of Standard Media Index. “Social and premium video remain the powerhouses of the digital sector.”

Read more at broadcastingcable.com.

Travis Howe has joined ESPN as senior vice president, digital ad product sales and strategy.

Howe, who had been executive vice president and general manager of global platform solutions at Mediaocean, will be responsible for establishing the go-to-market strategy for ESPN’s digital advertising business.

At ESPN, he will report to Ed Erhardt, president global sales and marketing.

"Travis is an outstanding and creative executive who has the vision to identify, develop and execute our key priorities for the digital sales team,” Erhardt said. "His expertise and thorough understanding of the evolving digital media marketplace will help enhance and drive the entirety of our portfolio."

Before Mediaocean, Howe was senior vice president/head of digital ad sales for the Americas at Sony. Previously he’d been with Accenture.

For all the hand-wringing about cord cutting and commercial avoidance, it’s hard to top TV advertising as a medium, according to the findings of a new report.

A study by Neustar commissioned by Turner Broadcasting and Horizon Media found that for a $1 million investment, television’s lift is consistently 7 times better than paid search and 5 times better than online display ads across a broad list of advertising categories.

The study comes as advertisers, through their media agencies, and the networks are negotiating upfront ad deals for the next TV season. During this year's upfront presentations, networks bashed digital advertising for an array of issues, including viewability, bot fraud and ads landing near content that isn’t brand-safe.

Related: ANA: Fight Against Bot Fraud Is Winnable

The new study also found that the lift from TV ad campaigns from 2010 to 2016 provided a lift 5 times better than online display ads.

“Dollar for dollar, TV provides the most scale and delivers the highest return on ad spend from both a sales and awareness perspective,” the report said. “It’s important to note that even TV will reach a saturation point, and the next marketing dollar should be spent elsewhere. To ensure an optimized marketing mix, advertisers should adopt a data-driven approach that can inform the ideal media allocation across all channels based on all internal and external market conditions to meet their performance goals.”

Read more at broadcastingcable.com.

Related > Viewer Watch 2017: Download the Complete Report

Though TV has long been a numbers game, hard data showing changes in the way consumers access video remains a hotly debated subject.

It’s not just that there’s considerable disagreement over how to interpret these changes among executives overseeing what Magna calls the $67 billion TV ad market and PwC describes as the $101 billion subscription pay TV business. There is also much grumbling over the kind of data that is available to answer these multibillion-dollar questions.

“I don’t think we’ve made as much progress as we should have made” in measuring the consumption of video on all platforms and devices, Turner Broadcasting System chief research officer Howard Shimmel said.

There also isn’t much agreement on how the growth in multiplatform video consumption will affect pay TV subscriptions. Some contend that the rise of over-the-top streaming options will sharply reduce the pay TV subscriber ranks; others believe the issue is much more complex.

“From its peak in the first quarter of 2012, the major providers have lost about 1.8 million subscribers,” Bruce Leichtman, president and principal analyst at Leichtman Research Group, said. “The industry is clearly saturated and in a slow decline.”

Interpreting those numbers remains controversial, in part because data on the size of the pay TV universe rests on different assumptions. Leichtman, for example, includes data from services like Sling TV in his company’s estimates, while SNL Kagan does not.

Nielsen also provides different numbers. It reports the number of homes that have TVs connected to a pay TV service, which is different than the number of total pay TV subscribers reported by operators, Nielsen executive vice president of research Glenn Enoch said.

“You have to be very careful about the numbers you use and [about] drawing a straight line from those numbers to revenue, because things are much more complicated than that,” he said.

Related > New Normal: Digital Distribution

CORD-CUTTING CALCULUS

A number of researchers agreed. The proportion of “people dropping pay TV subscriptions is now about 2.6%,” Leichtman noted, which is about the same rate as 10 years ago, when the industry was growing.

“The problem is that the number of new customers has declined,” Leichtman said. “We only see 1% [of homes] moving into pay TV. That is down from 3.5% a decade ago and it has had a real impact on the dynamics of the pay TV industry.”

The declines have been smaller than some had expected, SNL Kagan research director Ian Olgeirson noted. “We are seeing a slight acceleration in the decline in subscribers for multichannel services from a roughly 1% decline in 2015 to a decline of what will probably be 1.3% or 1.4% in 2016,” he said.

The causes of those declines are also hotly debated. “Service providers would say that a lot of those declines are driven by price” and economics, Olgeirson said. But that isn’t the whole story, as the economy has rebounded and housing starts have grown over the past two years, he said.

A recent Frank N. Magid Assoicates survey found that 75% of likely cord-cutters said the ability to watch content via the Internet and OTT platforms was a key reason to drop pay TV service, Magid Advisors president Mike Vorhaus said. Only 29% of respondents cited costs.

Research also challenges the prevailing assumption that pay TV and SVOD services are competing offerings, said Howard Horowitz, president and founder of Horowitz Research, who sees them as complementary to traditional pay TV.

Horowitz survey data shows that 52% of whites and 58% of Hispanics have both a multichannel subscription and a subscription VOD service, while only 5% of whites and 6% of Hispanics have just a SVOD service.

STAGNANT AD SPENDING

Much unease also surrounds the ad market. Brian Wieser, senior research analyst, advertising at Pivotal Research Group, said the economy faces considerable uncertainty over the next year.

“I don’t think anyone can say with any certainty what is going to happen next and that uncertainty is going to curtail advertising,” he said.

National TV ad revenue will drop slightly by 0.4% in 2017 to $44.6 billion, Wieser predicted, and remain essentially flat through 2020, when it will hit $45.2 billion.

Magna’s Letang also sees a weak TV ad market combined with bullish prospects for digital media. “In 2017, we see high single digital inflation [in pricing] but high single-digit declines in ratings,” Letang said. “National TV will be up 1% in 2017 from 2016 if you exclude P&O” — meaning the 2016 revenue from political ads and the Summer Olympics — “and down 1% if you include P&O.”

With political and Olympics spending included, Magna projects that total TV spending will drop by 4.8% to $64.2 billion in 2017, declining further to about $62.2 billion in 2021.

Digital spending, though, will continue to grow rapidly. By 2020, Magna forecasts that mobile advertising will more than double to $78.4 billion (38.2% of all advertising) and social media will hit $31.8 billion in 2020 (a 15.5% share). TV, meanwhile, will slip to a 32.4% share.

Given the uncertainty over the ad market and pay TV subscriptions, programmers and operators have been rethinking their operations.

NEED TO BE NIMBLE

The drive to adapt to new consumer habits has prompted a number of projects to make operations more nimble, Discovery Communications chief technology officer John Honeycutt said.

For example, Discovery’s recently deployed “On Ramp” project allows about 80% of the content produced by 600 production suppliers to be uploaded to the Amazon cloud, where it can be immediately available to Discovery employees and channels all around the world.

“Going from 0% to 80% makes us so much more flexible and efficient,” Honeycutt said.

Equally dramatic upgrades are occurring in the pay TV infrastructure. After ticking off a long list of new products and initiatives to deliver more content to more devices, Comcast Cable executive vice president, general manager, video and entertainment services Matthew Strauss noted that these efforts are built on major improvements to the MSO’s infrastructure.

“We are rolling out DOCSIS 3.1,” he said. “We are rolling out Gigabit speeds. We are transitioning more and more to all-IP, which will allow us to innovate and deliver more of these newer services.”

Rapid innovation has also become the norm for digital platforms. “In 2016, we launched 30 new products and made hundreds of enhancements on dozens of platforms,” Alex Wellen, senior vice president and chief product officer at CNN, said.

Much remains to be done, particularly in the area of measurement. This year will mark a notable improvement on that front, with Nielsen planning to begin syndicating its Total Content Ratings on March 1.

“But some of the networks have been saying they won’t be ready for Nielsen’s public rollout in March, and it isn’t clear if everything will be ready in time for the upfronts,” Jane Clarke, CEO and managing director of the Coalition for Innovative Media Measurement (CIMM), said. “It is a very complex process to get it implemented in the apps for every kind of player and all the devices.”

Others worry about the TV industry’s ability to maintain its share of ad spending without better data. “Measuring crossplatform video consumption is important, but it is a 2006 problem,” Turner’s Shimmel said. “Today, when we talk to advertisers, what they really care about is outcomes [such as sales] and I don’t see that kind of measurement anywhere in Nielsen or comScore’s future.”

More debates surround commonly held perceptions of the OTT market.

Michael Leszega, senior analyst of market intelligence at Magna, said that “in 2016, we have [more than] 25 million cord-cutters and cord-nevers,” and that this group will continue to grow. By 2020, he predicted, about 28.6% of all households will be outside the traditional pay TV ecosystem. “It is a sizable portion of the population that can’t be ignored,” he said.

That has prompted a number of companies to develop streaming bundles of channels like Dish Network’s Sling TV, Hulu, Sony’s PlayStation Vue and AT&T’s DirecTV Now.

“If you look at the rumors about Amazon or YouTube coming out with OTT bundles, there could be a whole bunch of them, maybe seven or eight by the end of 2017,” Steve Shannon, general manager of content and services at Roku, said.

Tony Goncalves, senior vice president of strategy and business development for AT&T Entertainment Group, described DirecTV Now “as a mobile-first-centric platform” that will deliver the kind of advanced digital features consumers expect from their mobile apps.

“DirecTV Now is pay TV as an app and it opens up a market that has not historically been addressed by pay TV,” he said.

Dish Network also sees great promise in the melding of pay TV packages, OTT delivery and app experiences, Niraj Desai, the company’s vice president of product management, said.

“TV is becoming an app,” he said. “We have been talking about that trend for a while, but 2016 was really the year TV as an app came into its own” with better TV everywhere offerings and the streaming OTT bundles such as Dish’s Sling TV and DirecTV Now.

COMPLEMENTARY PLAYS

Even better, these products open up new markets and are not designed to cannibalize traditional pay TV offerings, he added. “Sling is complementary to DBS,” he said, meaning Dish and DirecTV’s satellite-TV platforms. “Sling over-indexes with urban millennials and DBS resonates with suburban and more rural customers that are more traditional TV watchers.”

Similar views come from programmers that have aggressively targeted consumers without traditional multichannel TV subscriptions.

“We launched HBO Now with the theory that its subscribers were going to look very different from the traditional subscribers,” Bernadette Aulestia, executive vice president of worldwide distribution at HBO, said of the premium programmer’s standalone app.

HBO Now subscribers are 10 years younger than customers of HBO’s premium cable network and typically live in broadband-only households, she said.

“We look at it as an entry point to customers that are coming into the category,” Aulestia said.

The growing popularity of skinny bundles and streaming OTT offerings has also helped HBO’s premium pay TV business, she added.

“There was a time, as a premium service, that we were only sold at the top of the bundle,” Aulestia said. “The idea that HBO should be sold at every level of the bundle, and even as a standalone service, means there are fewer barriers to get HBO.”

The rise of OTT and skinny bundles has been more worrying for ad-supported networks.

“Getting more creative packaging of content to create more customized solutions for the consumer can be very challenging for content providers because you have increasingly fragmented audiences,” Joe Atkinson, technology, infocomm, entertainment and media advisory leader at consultancy PwC, said.

Atkinson and others said OTT distribution can also open up a number of new opportunities.

For instance, the growing SVOD market encouraged Turner’s recent launch of an OTT movie service called FilmStruck, Coleman Breland, president of Turner Content Distribution and president of TCM, said.

“As the bundle became tighter, we decided to go direct to consumer instead of trying to launch a linear network and push it through the ecosystem,” which would be difficult in the current pay TV environment, he said.

Turner has also been pushing to expand the content made available on all platforms both in terms of reach and quantity, with the addition of offerings like full seasons on-demand.

“We now have 450 affiliate partners for our TV everywhere products” and have seen usage jump by “triple digits” in the last year, Breland said.

TIME TO TARGET

Many of these newer products can be traced to a more fundamental change in the way operators think about their customers.

“Today, service providers have to figure out how to target different individuals in household,” PwC’s Atkinson said. “That is a tough challenge, but I think it is really the keys to the kingdom.”

One example of such a targeting effort is the development of packages targeted to consumers at different life stages. “College students have different needs than a single-family home with kids, and we are very focused on meeting all those different needs,” Comcast’s Strauss said. He said the Xfinity on Campus product has been a success in that regard.

Operators have also been greatly expanding the content sources via apps on Internet connected set-top devices such as Dish Network’s Hopper. “You can watch live TV with your Dish subscription, or recorded TV on your DVR or you can watch Netflix and YouTube all in one convenient place,” Dish’s Desai said.

Adding more choices has also been a top priority for Cox Communications, Steve Necessary, executive vice president of product development and management at the Atlanta-based cable operator, said. “We have more than doubled our VOD offerings from 50,000 to over 120,000,” he said.

Cox also has revamped its TV app to expand the content available on digital devices and speeded up the rollout of Contour — Cox’s version of the Comcast X1 Internet-connected set-top platform — from 3,000 customers to more than 600,000 in 2016.

Very importantly, such efforts are also beginning to pay off. Both Comcast and Cox are seeing some of their best video-subscriber efforts in a decade.

Programmers are also reporting strong gains from their digital platforms.

“There is a blending of content types and expansion of the platforms,” translating into some record-setting numbers, ESPN vice president of digital media research and analytics Dave Coletti said.

In year when some live sports audiences have declined, Coletti noted that Watch ESPN’s live stream of the Nov. 26 college-football game between third-ranked Michigan and second-ranked Ohio State — which went into double overtime before OSU prevailed, 30-27 — tallied 1,273,000 unique viewers, making it ESPN’s most streamed regular college football game. (The game telecast also aired on ABC.)

“Eight of our top 10 most-streamed regular season college football games have occurred this year,” he noted.

The 2016 presidential election helped CNN set a number of network records, Wellen said, including a record audience level on Nov. 9 with 77 million unique users, 83 million video starts, 483 million page views and 29 million live streams.

Equally notable was social media. CNN racked up 169.7 million video views on Facebook and 47.6 million Facebook Live views, he said.

“Those results show that it has become very important to be both a destination for content and a distributed brand,” he said. “We have apps and websites where people can access our content but, we’ve also seen that we can be very successful on Facebook Live” and other outside platforms.

Additional encouraging news can be found in TV use, Nielsen’s Enoch said. “The decreases that we saw in TV usage that really started to accelerate in the mid-2014 have lessened,” he said. “TV consumption remains at near record level.”

“We are also seeing a shift back to the more traditional way of hooking up a TV” to a pay TV service or an antenna, he added. “The universe of homes that can watch TV or can stream video to the big screen has actually grown,” reversing a trend that began with the digital transition and the 2008 recession.

That said, Enoch said the “fastest growing area of overall usage — not just video — is the smartphone.”

In the second quarter of 2016, Nielsen reports that consumers ages 18-34 spent almost as much time each week with their smartphones (14 hours and 36 minutes) and tablets (three hours and 27 minutes) as they did with traditional TV (18 hours and 27 minutes).

Less discussed but equally important are connected TVs. “TVs connected to the Internet by any device have grown from about one-quarter of all households in 2010 to about two-thirds of all households,” Leichtman said. “There are now more connected TV devices in American than there are pay TV set-top boxes.”

Said CBS Interactive president and chief operating officer Marc DeBevoise, “We are seeing explosive usage in those connected TV experiences.” He added that “time spent on connected TVs with our products has grown by more than 300%.”

As an illustration, consumers in October of 2016 spent about 347 minutes per month consuming CBS news content via desktop computers, compared with 360 minutes via Apple TV and 496 minutes via Roku, per unique viewer, DeBevoise noted.

“That is a lot of usage, and we are spending a lot of time making certain we can capitalize on that by getting those experiences right,” he added.

LINES ARE BLURRING

Connected TVs also offer much more advanced capabilities for search and discovery. For example, the Roku platform allows users to search for TV shows and movies across more than 100 apps, Roku general manager of content and services Steve Shannon said.

Advanced features are helping to blur the line between connected devices, pay TV operators and the new bundles of streaming channels.

Companies such as Hulu and Sling are increasingly bundling their subscription packages of channels with a free Roku, Shannon said. Also, Charter, Comcast and a number of other operators have either launched or plan to launch TV everywhere apps on the Roku platform so that subscribers can access a large bouquet of channels on the pay TV apps, he said.

“You have the normalization of OTT, where you are seeing massive amounts of traditional broadcast style content viewing on OTT platforms,” Shannon said.

Advertisers in the U.S. spent $17.6 billion on digital advertising during the third quarter, up 20% from a year ago, according to a report prepared by PwC U.S.

Digital spending continues to increase despite concerns over effectiveness, fraud and sometimes misleading metrics. Most forecasters expect digital spending to surpass spending on TV advertising as early as this year.

“Digital has become a critical part of advertisers’ marketing strategies,” said David Silverman, a partner at PwC U.S. “Increasing media consumption on interactive screens will surely lead to even more investment in the digital landscape.”

The third-quarter spending was also up 4.3% from the second-quarter total.

Read more at broadcastingcable.com.

The Federal Communications Commission (FCC) is conducting a rulemaking proceeding right now in which the agency explains that it is trying to come up with additional regulations for Internet service providers (ISPs) that will protect consumer privacy online. 

It's a compelling sound byte, but upon closer examination of the FCC's proposal, it appears the agency's focus is on shaping the digital advertising market, not protecting privacy. The stakes are high among the existing, dominant players so it is not surprising that the FCC wants to wade in. But it is surprising that the FCC seems to want to shield the dominant players from additional competition, an odd motivation when you read the continuous stream of FCC releases on any number of issues heralding its laser focus on increasing competition, not minimizing it.

Let's review some basic facts about the online advertising market. The two largest edge companies by market cap generate more than $90 billion in global revenue per year by selling targeted advertising based on what the company knows about its subscribers. Customers' online information – what they do, where they do it and other data – is the currency on which these businesses are built. This is clearly revenue worth defending and protecting.

Comes now the FCC rulemaking, which claimed to be doing what consumers wanted by setting up a regime of regulation just for ISPs and markedly different from what the Federal Trade Commission (FTC) had already established for online companies. Public surveys reflect that consumers are not clamoring for multiple and different regulations to protect them. Sensibly, a vast majority of American consumers say they want a uniform, strong set of protections.

Related:Democratic Senators Say Digital Ad Fraud Rampant

In a recent CIGI-Ipsos Global Survey on Internet Security and Trust, 82% of Americans said they are concerned that their information may be bought or sold. Similarly, in a recent Progressive Policy Institute (PPI) poll, 97% of those surveyed said they considered online privacy and data security to be important to them, and 94% said that all companies collecting data online should follow the same consumer privacy rules. Furthermore, 90% of Americans expressed that all Internet companies should operate under the same set of rules and regulations. No matter how the data is sliced – gender, age, race, location, political affiliation – Americans are saying the same thing: they want uniform protections.

The clear divide between what the FCC says consumers want versus what consumers actually say they want raises an interesting question: Why has the FCC worked so hard to cloak its unique privacy proposal in a shroud of consumer support? At the risk of assigning a less-than-noble motive to a federal agency, it would appear that saying the proposal is about protecting consumers has effectively kept it off the radars of investors in the sector.

Investors across the Internet sector would be alarmed to find out that the FCC was in fact intervening in the digital advertising market to shield the existing dominant players from fresh competition. By constraining just the ISPs' ability to leverage the consumer information they can legally observe and package for resale to advertisers, the FCC is preventing them from directly competing with companies like Google and Facebook for online advertising. To think that FCC action here is anything other than shaping the market is to fall for the theory that American consumers are clamoring for lots of different and conflicting restrictions on what companies can and can't do with their private information.

The only thing that the FCC's proposal will do is distort the digital advertising market and protect the dominant market position of the existing providers – the very anathema of American competition policy. The health of the online advertising market is critical to the future growth and evolution of the commercial Internet.  Today's dominant players will likely be tomorrow's smaller competitors and consumers will be the beneficiaries.  Everyone is clear that the "privacy as a currency" business model is here to stay. Let's expose it to more rather than less competition and let's give Americans what they want – a consistent, comprehensive regime that protects them as well online as anywhere else.

Roger Entner is founder and lead analyst at telecom consulting firm Recon Analytics.

The second round of bidding for Yahoo should close this week, with Verizon Communications reportedly lobbing in a $3 billion offer for the one-time Internet icon’s Web assets.

That’s roughly half the value some analysts placed on those properties three months ago, and further proof that telco Verizon either has money to burn or truly believes that digital advertising will be its future growth engine.

Other bidders were expected to participate in the second round — CNBC’s David Faber reported some bids topped $5 billion, but included real estate and other assets not part of the Verizon bid. A third round of bidding on Yahoo, which put itself on the block in February, is also expected.

Most analysts are expect Verizon to end up with Yahoo because they believe that the telephone provider has the best chance of turning around the once-proud company. That bids are coming in at less than half the $4 billion to $8 billion range targeted back in February is a testament to the decline of the business.

STARK FORECASTS

Yahoo’s bankers released a “sale book” in April that estimated 2016 revenue would fall 15% and earnings would dip more than 20%. The book also estimated that Yahoo would need to shed about 1,500 employees, ending the year with about 9,000 workers.

Verizon has had a soft spot for ancient Internet icons — it purchased AOL last year for $4.4 billion— and talk is that AOL chief Tim Armstrong is behind the telco’s enthusiasm for Yahoo. According to some reports, Armstrong believes Yahoo’s digital ad technology will mesh well with AOL’s existing ad business.

Verizon chief financial officer Fran Shammo didn’t want to say much about the Yahoo speculation at the Bank of America Merrill Lynch Technology, Media & Telecom conference in London, though he did say the telco is serious about its “mobile-first” strategy.

Within the next three to six months, Shammo said, Verizon intends to “cross-pollinate” its products, including integrating go90 and AOL to help it broaden viewership.

“When you get down to it, viewership matters because viewership drives advertising dollars which drives the top line revenue,” Shammo said. “Yahoo has viewership. We’ll see whether we do move forward or we don’t move forward.”

MoffettNathanson principal and senior analyst Craig Moffett has been ambivalent to a Verizon-Yahoo pairing ever since the telco expressed interest in the assets.

“Generally speaking, we think Verizon’s strategy to turn to advertisers rather than users for the next leg of wireless revenue growth makes sense, even if we admit to having a hard time judging their probability of success,” Moffett wrote in April.

He added that although it probably isn’t a great idea to buy a shrinking asset (Yahoo) in a growing segment (digital ads), taking into consideration expected synergies and the relatively low price, it can’t hurt.

Shammo was most excited about opportunities on the mobile front, especially in short-form content. Verizon bought a 24.5% piece of shortform video pioneer AwesomenessTV in April and he said that its go90 mobile offering will focus on video snippets rather than longform content.

“I want to fill up the 10 times a day that you have 10 minutes free,” Shammo said. “I want you to come to my platform and digest 10 minutes of content from go90.”

But to pay for those 10 minutes, viewers are subjected to ads, and that’s where Yahoo could fit in.

While mobile ads are on the rise — Kleiner Perkins Caulfield & Byers partner and Internet guru Mary Meeker values the mobile ad market at about $22 billion — clients have complained that consumers aren’t watching them. That is backed up In Meeker’s June Internet Trends report, which claims 93% of mobile users are considering purchasing ad blockers and 81% mute video ads.

VIDEO ADS ON THE RISE

The push has been to make mobile ads more watchable, and that’s where Yahoo could come in.

Yahoo has sharpened its focus on short-form video and says video advertising is one of its fastest growing business segments. According to a blog around Yahoo’s May NewFronts, chief revenue officer Lisa Utzschneider said video advertising was up 64% in 2015 and continues to grow. Yahoo is focusing on producing more ad content — the ad unit produced 54% more video in 2015 than in 2014 and viewers are eating it up. Compared to a year ago, Yahoo video viewers are consuming 55% more content and spending 85% more time on average with it.

“That translates into meaningful opportunities for marketers,” Utzschneider said in her blog post.