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Advanced AdDeployments Accelerate

Advanced Advertising has long been regarded as the industry’s version of a cure for a dreaded disease: something coming in the future, after yet a few more years of research and work. But the tide seems to have finally turned.

“Pretty much every year since 2004 or 2005 has been described as ‘the year of advanced advertising,’” admits Paul Woidke, senior VP/general manager of advanced advertising for NagraOpenTV and chairman of the SCTE’s DVS Working Group 5, which has developed key standards for the technology. “What is different now is that it is deployed. The big operators have it out in the field.”

Estimates of the size of these deployments vary for specific technologies. But there is little doubt that deployments of some types of advanced ad technologies have passed the 20-million barrier that major advertisers consider the minimum reach they need for successful campaigns.

One rapidly advancing technology is dynamic VOD ad insertion, which allows ads to be switched in and out of VOD content quickly. This is a vital development for the future of VOD advertising because traditionally, the same ads remained in a program for the entire time it was on the platform. Being able to insert new ads will make VOD advertising a much more appealing medium for movie studios, retailers and others with time-sensitive campaigns and promotions.

Comcast currently has dynamic VOD advertising enabled in the “high 80%” of its VOD-enabled homes, and will have the technology in its entire VOD footprint “within a few months,” says Marcien Jenckes, Comcast senior VP and general manager of video services.

A number of other operators are also deploying these capabilities. Overall dynamic advertising platforms could be available in 30 million to 40 million homes by the end of 2012, estimates Nick Troiano, president of advanced advertising technology company BlackArrow. That represents a significant proportion of the country’s VOD homes, which Magna Global projects will hit 58.9 million at the end of 2012.

“There is significant momentum going into this year’s upfronts,” says Troiano. (BlackArrow is providing advanced ad solutions to Comcast and other operators.) “This year will probably be the first time they will be talking to agencies about upfront opportunities for dynamic insertion of VOD.”

Jenckes adds VOD usage has also increased as programmers have made more hit shows available, making it a potentially important ad medium. “We are driving on average 400 million VOD streams a month,” he notes. “It is a very significant advertising opportunity.”

An even larger footprint has been created for interactive TV (iTV) applications. Canoe Ventures’ request for information (RFI) interactive application that allows viewers to request additional info from an interactive spot is currently deployed in “north of 25 million homes,” says Arthur Orduna, chief product officer at Canoe, which is owned by the six largest U.S. MSOs.

That is large enough to attract significant interest from advertisers. “We have found that many advertisers think that a footprint north of 20 million, let alone 25 million, is a very viable commercial target,” he says, “and 20 million is very much big enough for the creation of a real business, not a trial, that can generate the kind of return these advertisers are looking for.”

Aseem Bakshi, general manager of advertising at SeaChange International, which has major deployments of advanced advertising systems with the U.K. cable operator Virgin and some U.S. cable and telco operators, notes that they are also seeing an uptick in deployments both in the U.S. and internationally.

“The technology is there, and now a lot of the discussions are about how they are going to make money on it,” Bakshi says.

Cablevision, meanwhile, has deployed addressable advertising that allows them to deliver ads targeted to specific demographic groups in its entire New York metropolitan area footprint of nearly 3 million homes, reports David Kline, president and COO of Cablevision Media Sales.

And the Cablevision footprint, combined with deployments of addressable systems at DirecTV and Dish Network, could boost the overall addressable universe to around 20 million homes by the end of 2012, B&C recently reported.

Overall, Cablevision has deployed some 18 different advanced advertising products, ranging from interactive ads and requests for information to commerce applications that are having a significant impact on their business, Kline notes.

“We had more than 900 advanced advertising campaigns in 2011 and at least 600 advertisers took advantage of at least one of our interactive products,” says Kline, who acknowledges the importance of these technologies for the future of multichannel advertising. “It is a critical part of our business.”