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NDS, TNS Tap DVRs For Targeted Ads

Interactive-TV software and conditional-access supplier NDS and audience-measurement firm TNS Media Research want to use the existing base of set-top digital video recorders (DVRs) to deliver targeted ads to satellite and cable subscribers.

NDS, which was taken private by News Corp. and private equity firm Permira in August, and TNS announced at the IBC 2008 show that they were teaming up to develop a new platform for delivering targeted advertising called NDS Dynamic, as well as a set-top-based audience-measurement solution for multi-channel operators. The deal made sense, as the two companies have previously worked together on audience measurement and count several large operators as mutual customers.

DirecTV, for example, uses NDS’ conditional access and set-top software technology, and has also partnered with TNS to create DirecTView, a sample of 100,000 DirecTV subscribers that measures second-by-second viewing, both live and time-shifted via digital-video recorder, of programming and commercials via return-path set-top data.

Now NDS and TNS are providing some technical details on how they will actually deliver targeted ads. NDS’ idea is to push targeted ads in advance that will be stored on the hard-drive of a set-top DVR based on a subscriber profile that TNS creates (subscribers would have to opt-in for such targeting, given privacy regulations). Then, when a consumer is watching either a live or timeshifted program, the ads stored on the DVR will be inserted to replace the non-targeted ads included in the normal linear program stream. NDS and TNS will pull the set-top data via the phone line or broadband return path and will be able to report to advertisers whether viewers watched the ad or skipped it.

NDS demonstrated the system running on Pace set-tops with NDS middleware in a briefing in New York last month. Gideon Gilboa, product marketing manager of advertising solutions for NDS, won’t reveal all the technical details of how the targeted insertion is accomplished. But says that it is based on MPEG-2 splicing technology and triggers within the program, in the form of metadata, that signal to the NDS software where the commercial breaks are.

NDS’ targeted-ad concept, which it hopes to trial some time next year, is not surprising. Last year, News Corp. applied for a U.S. patent for a process by which an MPEG-2 compressed program would be broken up into a series of segmented files that separates program content from commercials and promos. Fresh commercials could then be delivered to the DVR on a “push” basis, through either broadcast or broadband delivery, and new software would be smart enough to record them and then “splice” them into the program when a viewer watches a time-shifted show.

A push model for targeted ads obviously makes sense for satellite broadcasters like DirecTV, who don’t enjoy the same real-time two-way connection with a subscribers’ set-top as digital cable operators do. But Gilboa thinks the push model may be attractive to cable operators as well, as it leverages existing set-tops without having to install new gear at the headend.

“You can introduce targeting without a heavy investment,” says Gilboa.

But will consumers still watch the commercials in a time-shifted program? George Shabbab, president of TNS Media Research, says they will, particularly if the ads are relevant. TNS set-top data indicates that some 44% of ads within time-shifted content are watched as live, says Shabbab, which suggests that fast-forwarding through commercials “may not be as pervasive” as early data on DVR usage projected.