Digital Addressable Advertising Gaining Momentum

Digital addressable advertising appears to be ready to come out of the chrysalis stage and sprout wings this year.

According to a recent report by In-Stat, this is the year that digital addressable advertising starts to emerge before becoming "a key, long-term growth driver later on for hardware, software and service vendors." The worldwide annual value of digital addressable advertising equipment, software, systems and services could exceed $540 million by 2011, according to the study.

"There are over 8,000 headends in the U.S. cable market, and probably that many more throughout the world," said In-Stat analyst Gerry Kaufhold, in a prepared statement. "Many of these headends are older, analog systems that are not likely to provide digital addressable advertising capabilities. However, In-Stat believes that well over 4,000 cable headends throughout the world will have two-way, digital capabilities by the end of 2011."

Digital addressable advertising is all about getting the right message to the right viewer at the right time, and new technologies such as CableLabs‘ OpenCable Applications Platform (OCAP) and switched digital video will allow cable operators to hone their offerings.

The report also cites VOD and HDTV for providing the means of expanding the market for cable TV advertising services, along with digital addressable advertising.

"An ad model has to exist for free VOD to function, as that tier is growing at a rapid pace," said SeaChange‘s Terri Swartz, director of Advanced Advertising, via an email. "Somehow that has to be monetized because VOD programming isn’t going away. In the long run, addressability will reach a much more engaged and targeted audience, which will eliminate the notion of ads being too invasive." Technical developments will jump-start addressable market The report said several recent addressable advertising developments were presented at the SCTE‘s Emerging Technologies conference earlier this year. Recent developments include the following:

• The SCTE has published SCTE 35 2001, which defines the Digital Program Insertion (DPI) Cueing Message for Digital Cable TV systems.

• A second standard, SCTE 30 2001, defines the Applications Programming Interface (API) for Digital Program Insertion splicing.

• The SCTE DVS 629 project is creating a standardized method for communicating between an Advertising Decision Service (ADS) and equipment that delivers the content to consumers.

• Finally, CableLabs’ OCAP includes an Enhanced TV, or eTV, specification that will eventually be used to make it possible for digital cable TV systems to offer truly interactive ads, similar to what is happening today via broadband Internet.

Speaking on an ET panel in January, Comcast Spotlight VP Technology Paul Woidke predicted there wouldn’t be home runs this year on the advertising front, but there will be "some singles and maybe some doubles."

"We’ll see eTV and EBIFF in enough markets that we’ll get to play with them," Woidke said. "We’ll see addressability moving into some trials, and we’ll also see some on-demand playlist trials, but none will be the thing that turns the entire industry around. Under those three metrics, and with accountability built in, we may not see home runs until ’08 or ’09, but some solid swings will be taken at the plate this year." – Mike Robuck