VOD Ads Gain Traction

NEW YORK — As video consumption gradually shifts to the on-demand model, it’s only natural that the advertising dollars will follow. Based on some recent VOD activity, that could also represent a bit of good news for the advertisers that are pushing products.

Ads delivered via set-top video-on-demand have shown to be more effective than those delivered through linear TV, establishing a higher level of engagement with viewers, a top executive with the MSO-backed Canoe advanced-advertising joint venture said.

According to a recent Canoe study, VOD ads generated a 6% lift in retention, a 4% lift in the viewer’s desire to search out the advertised product and a 14% increase in overall ad “likability,” Chris Pizzurro, head of product, sales and marketing at Canoe, said during an advanced ad panel June 10 at the Multichannel News/Broadcasting & Cable OnDemand Summit here.

Canoe, which counts Comcast, Time Warner Cable, Bright House Networks and Cox Communications as its backers, used its dynamic VOD ad-insertion platform to pump out 2.56 billion ads in the first quarter of 2015, soundly beating the mere 803.84 million it delivered in the year-ago quarter. Canoe now touts a national footprint spanning about 130 designated market areas (DMAs), including 48 of the top 50.

“The on-demand world is here to stay,” added Jim Keller, vice president of East Coast/Midwest sales at Hulu, which has recently struck distribution deals with several cable operators, including Cablevision Systems. “Consumers today are in the control seat.”

That also goes for other streaming players that deliver content to mobile and TV-connected devices. Ad-supported VOD “is one of our fastest growing segments,” noted Scott Rosenberg, vice president of advertising at Roku, which recently struck an ad measurement deal with Nielsen.

Still, ad buying in the on-demand world remains a difficult challenge due to the multitude of platforms in the market — everything from traditional set-top boxes to smartphones, tablets, streaming players and gaming consoles.

Jon Heller, co-founder and co-CEO of FreeWheel, the ad-tech firm now owned by Comcast, offered some advice for media buyers that are seeking the most effective way to develop and launch an on-demand campaign: “Please do not treat the world as a Web browser,” he said, noting that one-third of digital viewing is not on a laptop, and that ad budgets must now span a world of syndicated platforms.

FreeWheel, a company that cut its teeth in the online/digital ad world, is starting to extend its reach into more platforms, including the set-top box. Aiming to unify advertising across screens and devices, FreeWheel said it has booted up a VOD trial that enables programmers to manage ads delivered via IP/digital and set-top boxes via the same platform. That trial is being conducted with Comcast, programmers such as ABC and A+E Networks, and Canoe. Other pay TV operators are expected to join the pilot.

Advertisers are “looking for that total audience measurement,” Keller said.

Still, getting an accurate fix across those platforms won’t be easy, Jonathan Steuer, chief research officer and vice president of data products strategy and insights at TiVo Research, said.

Using a “mosaic approach,” he explained, can also lead to some guessing games in the final viewership unit analysis, as it can be difficult, for example, to know if the same viewer was reached with an ad on just one platform, or via multiple platforms.