We've heard nearly a decade of talk about the promise of dynamic ad insertion (DAI) in video-on-demand content. And those efforts, it seems, are finally making notable progress.
"Nearly 30 million U.S. homes are now enabled for dynamic advertising" in Comcast and Time Warner Cable systems, says Nick Troiano, president of BlackArrow, which supplies dynamic VOD insertion technologies to Comcast, TWC and others. Troiano expects the total to hit 35 million to 40 million in 2013.
The developments are important because viewers are increasingly migrating to ondemand viewing. Comcast, which will have DAI systems deployed in "90% to 100%" of its footprint by year-end, now serves up some 400 million on-demand video streams a month on its traditional VOD platform, which is regularly used by 75% of its subscribers, notes Matt Strauss, senior VP of digital and emerging platforms for Comcast Cable.
But until recently, monetizing the VOD platform was difficult given the complexity of inserting new ads into VOD content. However, DAI technologies overcame that problem by quickly changing the ads embedded in VOD content, which makes the VOD platform much more attractive to movie studios, retailers and other sponsors with time-sensitive messages.
"Dynamic ad insertion is where our clients want to go and where we want to go," says Peter Blacker, executive VP of digital media and emerging business, Telemundo Media. The Hispanic broadcaster is planning to deploy a DAI system by year-end to help capitalize on growing usage of VOD that made it the "No. 1 U.S. Hispanic VOD provider," Blacker adds.
To further expand those efforts, operators are also looking at systems that would integrate the VOD and TV Everywhere platforms so that advertisers could easily carry out cross-platform campaigns for live TV, VOD, mobile and online. Vendors including Adobe, Avail-TVN, Elemental and SeaChange have developed or are developing technologies for those efforts.
"The ultimate objective is to unify dynamic ad insertion across platforms so that we can monetize these audiences and platforms in a way we haven't been able to do in the past," Strauss says.
Addressable ad technologies that can serve ads targeted to specific demographic groups are another major focus. Cablevision has deployed addressable advertising systems throughout its footprint, and Dish Network has done more than 35 addressable campaigns across its footprint of about 8 million subscribers with addressable set-top boxes.
That has produced a significant amount of interest from advertisers because it allows them to both target their messages and have better control over campaigns, says Warren Schlichting, senior VP of Dish Media Sales.
Schlichting notes that the industry must work together on standards-based technologies so that advertisers can run campaigns across multiple operators. "Eight million homes is great, but we want to get to 20 million, 40 million, 60 million homes as soon as we can," Schlichting says. "That is when the industry really starts to change."
Vendors are focusing on several key areas to further develop dynamic ad insertion and addressable advertising systems, both for live and on-demand programming.
Jim Riley, Avail-TVN's chief revenue officer, notes that they are already seeing increased demand for their technologies that help programmers prepare programming for VOD dynamic ad insertion.
"Many major networks are asking us to do incremental work to prepare assets for dynamic ad insertion," he says.
To help streamline that process, the company launched the Advanced Advertising Insertion and Marking service (AAIM) last year, and this year added a number of features to that tool. These include support for mid-roll ads and placement opportunity authoring and management capabilities, which allow placement and business rules to be made available through a POIS interface using SCTE-130 standards.
Better reporting, measurement and data management will also be crucial, Riley and others note.
Troiano at BlackArrow notes that they launched a Subscriber Information Service tool this year that is designed to help operators provide addressable ads across multiple platforms. "It is a data product that is focusing on helping pay TV operators leverage subscriber data for addressability that provides integrated or consistent data across all the platforms, be it VOD, online or interactive," he says.
BlackArrow has also added ability to dynamically insert ads into live streams.
This move to put targeted ads into live streams of content for multiple platforms is another major focus of technological development.
Keith Wymbs, VP marketing at Elemental notes that multiplatform delivery has been a major focus of their work and that they demonstrated solutions supporting the Event Signaling and Management (ESAM) dynamic ad insertion standard at the September 2012 CableLabs Linear and IP Ad Interoperability event.
At the event, Elemental showed its products with a linear broadcast architecture and "in workflows designed to support dynamic ad insertion for new media," Wymbs says.
The use of standards is particularly important in simplifying the process of deploying these systems. "In general, when you have standards, you have fewer questions about how operators and programmers can monetize the content," he notes.
Others agree. SeaChange International has adopted a standards-based approach to its advanced advertising solutions, which include Infusion Spot and Infusion Ad Pulse, which are capable of handling live and on-demand content delivered to multiple platforms, notes Aseem Bakshi, general manager of advertising at SeaChange International.
Bakshi sees a four-stage development in multiplatform advertising. It starts with developing the systems for retransmitting TV content to other platforms and then progresses to the point where new ads can be inserted into the content. "This is where we are today," he says.
The next step, he believes, will be targeted and addressable ads that could use "traditional marketing demographics," or "user behavior analysis." A final step would be multiplatform-coordinated ads-delivering advertising to a mobile phone or tablet-that would enhance a linear TV ad.
Bakshi also sees the market moving away from the use of multiple formats that have made it so complex and costly to deliver content to multiple devices. One encouraging development is the growing reach of Apple's HLS, which is making widespread progress. "The format wars," he says, are coming to an end, with Android 4.0 supporting Apple's HLS.
A number of major business issues, however, are still under discussion. Currently, the traditional split of advertising between operators and programmers for cable programming seems to be moving to VOD and other platforms. But this could change over time, with different splits being agreed upon for content after the initial six-day window.
"A lot of the technical and workflow issues are pretty much handled," says Riley. "It's really now a matter of the networks and the operators sorting through what the business relationships are going to be."
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