The shift from trial to deployment is (finally) underway

Comcast has issued no formal announcement, but the MSO appears to be expanding its dynamic video-on-demand (VOD) advertising capability beyond an initial trial and across its larger footprint. In October, Comcast and advanced advertising technology company BlackArrow said they were trialing dynamic VOD advertising in Comcast’s Jacksonville, FL, system.

That was six months ago. Momentum looks to be building.

“Use of the word ‘trial’ in the cable industry is new to me,” said Troiano. “I’d say it’s a deal, rolling across Comcast markets as we speak.”

The idea of combining VOD with targeted ads has been around for many years along with high expectations. “VOD Ads Ready To Take Off”—that was a MediaPostNews headline from August 30, 2002. Eight years later, that headline may fit today’s realities. The timing of the Comcast initiative, at any rate, looks fortuitous.

As it rolls out dynamic VOD advertising capability, Comcast has also joined with seven other operators and a group of movie studios to launch a $30 million marketing campaign,promoting VOD. The three-month ad campaign, developed in conjunction with the Cable & Telecommunications Association for Marketing (CTAM), is titled “The Video Store Just Moved In.”

At a time when more folks are watching online video, the CTAM campaign hopes to show consumers that VOD is more convenient than going out to a video store and more comfortable than watching streaming video at a computer.

Participants in the marketing campaign include Armstrong, Bend Broadband, Bright House Networks, Cablevision Systems, Comcast, Cox Communications, Insight Communications and Time Warner Cable, along with studio partners: 20th Century Fox, Focus Features, Lionsgate, Rogue, Sony Pictures Entertainment, Summit Entertainment, Universal Pictures and Warner Bros. Entertainment.

The marketing push should give operators a boost in their pay-per-view revenue. And dynamic VOD advertising holds the promise of increased ad revenues as well.

Apart from Comcast, other operators are working on dynamic VOD advertising.In the first three months of 2010, Bresnan Communications conducted a dynamic VOD advertising trial in its Montana markets of Billings, Bozeman, Helena and Missoula. The operator integrated products from ARRIS, Avail-TVN and BlackArrow.

In the past, VOD programming could only accommodate static VOD ads that were baked into an asset. The advertiser had to provide the ad 45-90 days in advance of its play to give the programmer time to embed the ad asset into the program.

“Now, at Comcast and Bresnan, we have a clean asset,” said Troiano. The TV show is sent independent of creative assets and the ads are inserted at time of play.

“It’s akin to how things work on the Internet,” he said.

Cox Advances, too

Comcast and Bresnan aren’t the only ones pinning hopes on dynamic VOD advertising. The U.K.-based Virgin Media  is rolling out the technology in 2010, as is Cox Communications.

“We’ve already done true dynamic ad insertion,” said David Porter, VP of advertising product development for Cox Media, the advertising services division of Cox.

In 2009, Cox Media and NBC Universal conduced a test, inserting different advertisements into two of NBC’s programs offered the day after initial airing. The trial was conducted in Cox’s Phoenix, AZ, system.

During the test, up to four ads in a program were refreshed several times per week, including ads at the beginning of the program as well as ads within the program, known as interior breaks.

“We started to realize VOD was a competitive differentiator for cable operators,” said Porter. “VOD brings the convenience and control of the Internet. VOD also preserves the economics of the TV ecosystem.”

Porter wouldn’t name systems, but indicated a corporate commitment. “Through 2010, we’re going to be rolling out dynamic ad insertion one market at a time, and engaging one network at a time,” he said.

The process involves installation of ad insertion equipment and making it work with different components, playout gear, reporting gear and back office systems.

“It’s not a quick, simple process,” Porter said. “We’ve got about 18-20 different unique headends.”

For the Phoenix test, Avail-TVN, SeaChange International and Texscan NT collaborated to support the end-to-end workflow required for dynamic ad insertion. Porter said Cox used SeaChange’s AdPulse product, but “I’m not suggesting that’s the one and only,” he said. “The goal here is to use open standards.”

Sunflower links ads, nets

Sunflower Broadband in Lawrence, KS, uses SeaChange’s AdPulse product to do pre- and post-roll VOD ads for local avails.

At this point, Sunflower just allows an advertiser to target a specific network for VOD ads. For instance, a garden shop might want to place ads on HGTV on demand programming, or a hospital may want to buy VOD ads on Discovery Health.

“Nine out of 10 AdPulse buys are incorporated in the overall campaign,” said Misty Jensen, general sales manager with Sunflower Broadband.

“Sunflower is using targeting that advertisers are very familiar with,” said Cox’s Porter. “That’s a good way to start. But it is by no means the end game.”

He said Cox eventually wants to bring much finer targeting into its VOD advertising such as geographics and demographics.

Once dynamic VOD technology is installed and tested and ads are being sold on a regular basis, the technology may offer the opportunity to target ads based on specific shows and viewer behavior, as well.

“We’re not doing that right now,” said Porter. “Let’s get insertion gear deployed to all our markets first.”

Linda Hardesty is associate editor of Communications Technology. Reach her at lhardesty@accessintel.com.

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