ACTV targets spot market

Casual followers of the interactive-television scene may remember ACTV as the company that teamed with Fox Sports Southwest to produce enhanced sports broadcasts with reams of stats and a Star Cam focusing on marquee players. Convergence enthusiasts might be familiar with HyperTV, ACTV's technology for linking Internet content to television programming.

But few industry watchers may be aware of ACTV's ambitious effort to transform the way cable subscribers watch commercials. Through a subsidiary named Digital ADCO, which counts Motorola and OpenTV as investors, ACTV wants to deliver individualized commercials, so that a family gets a minivan ad while a bachelor gets one for a sports car.

The software-based system, branded SpotOn, is designed to work with existing digital set-tops such as the Motorola DCT-1000 and DCT-2000 models. It will begin testing in January at AT&T Broadband's system in Aurora, Colo. ACTV has also picked up advertising firms Grey Global Group and CYLO as SpotOn partners.

"For the first time, we're going to be able to give the consumer more-relevant ad copy to the household," says Marc Favaro, vice president of national advertising sales for AT&T Broadband. Using ACTV's One-to-One TV software, AT&T will experiment with both presenting viewers a choice of advertising and using the intelligent memory in the set-top box to allow viewers to select relevant commercials.

"If we've got the ability to overlay some content to the customer, you're going to see a commercial message from Ford Motor Co., where you could pick 'a' for Windstar or 'b' for Excursion," says Favaro. "But we want to make it as relevant as we can for the consumer. Over time, if they click on 'a' for Ford Windstar, we may offer up [additional] commercial copy that's more relevant to that choice of ad, such as commercials for diapers or baby food."

The basic premise of SpotOn is that the process is transparent to the TV viewer. And that's where ACTV's "seamless-switching" technology comes into play. According to ACTV President David Reese, the software can switch from one MPEG-2 stream to another, at the set-top, without any channel latency (otherwise known as "acquisition time," the momentary delay while a digital set-top box tunes in a new MPEG-2 stream).

"I would argue that you significantly reduce the effectiveness of a targeted ad if you get any video effect [to indicate] that anything happened," says Reese. "This application ensures that the appropriate segments are delivered to the set-top box."

ACTV's "pin-switching" technology, he says, can be used to target commercials within an operator's analog or digital tier. "The channels don't have to originate in the digital channels. We can take an analog channel and virtual-channel-map a commercial to a digital channel."

ACTV is also bringing its One-to-One TV technology to pay-per-view sports through an agreement with iN Demand and Liberty Media, which is ACTV's biggest investor (subsidiary Liberty Digital owns more than 25% of ACTV). The concept is that a pay-per-view customer could watch different views of a sporting event or receive enhanced content, such as highlight packages, stats or instant replays.

ACTV isn't backing away from convergence applications such as HyperTV, which is used to distribute enhanced programming daily for The Box Music Network and has also been used by New Line Television, TBS and Starz Encore. The company has also acquired Silicon Alley firm Bottle Rocket to target Internet gaming and has partnered with Sportvision to develop "two-box" applications that marry television and Internet sports coverage. Eventually, those applications are expected to meld in TV via next-generation set-tops.