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How VOD Is Changing the Ad Game

According to Rentrak data, an estimated 57 million U.S. households were watching at least one form of video-on-demand in 2015, with the average viewer taking in more than nine hours of VOD content each month. This presents advertisers with a massive growth opportunity in the VOD space, with more and more retailers going the ad route (see Vudu’s recent addition of an ad-supported movie section).

But Gerry Sutton, CEO of digital ad-delivery platform company Adstream — which has delivered more than 18.1 million ads worldwide — says the industry is still finding its footing when it comes to delivering the right commercials to the right places, and in making sense of the data that comes back. Sutton chatted with Next TV contributor Chris Tribbey about the challenges that exist. Here’s an edited transcript of their conversation.

NTV:How have emerging VOD models changed the way distributors look at advertising?

Gerry Sutton: We’re moving into broadcast 2.0, where many of the broadcasters have started to realize that they’ve done broadcast very well for decades, but they’re playing catch-up with the technology associated for the on-demand side. They’ve all gone out and built an on-demand product of some form or another, and what’s now happening is a genuine re-engineering of how they approach VOD.

They’re changing their workflows, their processes and, in a lot of ways, on-demand is the central focus now. And where we’re trying to work with them to not just push a piece of content through, an ad that goes with that particular media buy and that particular playout schedule, but actually look at the advertising currently available, and have it appropriately tagged with metadata so they know where it can be used, and then back-end it into the playout systems they’re now utilizing so content is much more readily available.

Another critical trend that’s appearing, if you go back up the chain, is we’re seeing the big brands take more responsibilities with their assets, more ownership in the production cycle, where those assets go and how they’re placed. And they have the technology to do that today, so the content can be immediately available with the metadata and tagging.

MCN:How far have we come in terms of analytics, and what can we be doing better in that area?

GS: At the end of the day, we all know that analytics, particularly getting the data back to the brand to help drive the process, is the Holy Grail of what everyone’s trying to do. I do think that, increasingly, you’re getting significantly better at collecting the information necessary to drive the decision-making.

As far as our platform, we think we’re a good engine to provide the details around the cycle time of a production, the usage, the wastage, the number of approvals it took, who did what, where it happened and what got utilized in the marketplace. The linkage, then, is how do you combine that with the playout statistics, the services that capture the actual consumption? We want to try and provide the best chain of custody, and I think we’re still in the early stages of getting the data and analytics right, as it relates to advertising and understanding how to read that data.

There are still a lot of concerns and work that needs to be done in the digital world to measure performance, but, fundamentally, we’re getting better and better at it. The reliability of that data will become more apparent.

MCN:When it comes to the metadata associated with ads, is it important to have standards, or are we OK with having everyone do it differently?

GS: I think the standards will eventually merge, some of the emerging tagging methods have helped and many of the ad-service playout engines have shown consistency in their interpretation of what a demographic might be, and so forth. It is an area that needs a lot more work, especially on the creative side, ensuring that tagging happens at the beginning of the cycle, especially regarding what it’s being made for, and ensuring that it’s consumed appropriately by the ad servers.