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Cox: FreeZone Stats Show VOD Ad Potential

Since Cox Communications Inc. launched its free, ad-supported on-demand service in San Diego a year ago, more than 2 million advertising videos have been accessed by half of all the system's cable customers.

Those viewers accessed 3.76 videos per week, and each unique viewer spent 25 minutes per week watching advertising content.

Those were among anniversary findings Cox released last week on a nascent category — VOD advertising — that Cox hopes can generate revenue in the future.

"We definitely believe in on-demand as a platform for advertising," said Debby Mullin, vice president of marketing and new media for Cox Media. "We're looking to take the platform to the next generation" and eventually launch it in other Cox VOD markets.

Over the past year, dozens of advertisers placed ads on FreeZone. Some were typical 30- or 60-second spots tied to a specific program.

Others were "advertainment," or three- 12-minute content segments that blended advertising and entertainment. For instance, BMW Films placed its popular "advertainment" segments on FreeZone.

There were also 30- to 60-minute product infomercials.

Mullin said both local and national advertisers have participated.

Initially, Cox did not charge for the space. Over time, the MSO created a rate card for it.

The test bed encompassed all of Cox's more than 100,000 VOD-enabled homes. Advertisers were rotated on and off the service, to keep content fresh.

Of all the statistics, Mullin said, "the time spent [with the ads] most definitely was quite surprising. It gives rise to whole new set of metrics that are emerging. It's more a depth and duration, and experiential to measure ad impact."

Cox engaged Frank Magid Associates to conduct research into usage and attitudes, Mullin said. It found that FreeZone helped lesser-known brands significantly increase total recall among viewers, creating a positive consumer perception.

The Magid numbers also found that 81% of viewers said Free Zone provided additional value to their cable service, and the majority labeled it easy to use and convenient to find.

"Viewers love the fact they can control when they watch," Mullin said. "If this content is relative to viewers, they will watch it and it will be useful to them."

Free Zone also offered opinion polls and a direct-response feature on some ads. Participation in opinion polls reached 26%, Cox said. On the direct-response front, the average response rate for requests for information at the end of some ads was 4.4% — higher than is typical for direct mail.

Mullin said Cox plans to work on making the content creation and placement on server process smoother, before expanding FreeZone to other Cox markets.