Tim Hanlon considers himself a VOD zealot. As an SVP at Publicis Group Media Ventures he’s ushered numerous advertisers into this emerging platform. But last March Hanlon was steaming, and it had nothing to do with the unseasonable humidity. Anxious to jumpstart the nascent VOD sector, cable operators had announced their intention to report four datapoints for On Demand advertising. To say the advertising community was underwhelmed is a gross understatement. "The four data points…are still nowhere near the data sets that we’re going to need," Hanlon said in April. Indeed, Hanlon himself had spearheaded a much longer list of 16-17 datapoints as chairman of the American Association of Advertising Agencies (AAAA) Advanced Television Committee. You get a good measurement of the problem in VOD measurement by contrasting Hanlon’s ire with the optimism of Page Thompson, VP and GM of Comcast on Demand. "On Demand is probably already one of the most accurately measured television advertising deliveries ever," Thompson says. The View Cable had agreed to report the number of VOD-enabled set-top boxes in a Nielsen market (DMA); the total views by program per month; the number of unique set-top boxes viewing a program per month; and the total minutes viewed by program per month. But what constitutes a view, and what does it mean for advertisers? "A view is just the start of a video stream," Hanlon says. "It doesn’t tell us anything about minute one, minute two, minute 17. So if an ad message doesn’t hit until the third minute in a video stream, we don’t know if it was viewed, we just know that it was started." In short, a `view’—in Hanlon’s view—meant nothing to his advertisers. What Madison Avenue wants—and fast—is more in-depth, granular reports that incorporate demographics, the key currency of advertisers and agencies. Fast-forward to last month at a SeaChange-hosted analyst day. The weather in New York was mild, but Hanlon was still steamed. In his view, cable had made very little progress since announcing the four VOD measurements in March. Still, Hanlon’s a believer. "This is not a condemnation of the VOD space," he told the analysts as they lunched during his keynote. "You’ll find nobody more bullish about the potential for ad-supported On Demand television content. But there are some stumbling blocks that are preventing this business from really ratcheting up." Cable’s Side of the Story—Something’s Better Than Nothing It seems the two sides are far apart. Not so, cable insists. It believes it’s been responsive to complaints from Hanlon. Cable acknowledges that the four datapoints were merely a first attempt at a unified starting point. AAAA’s list "was not informed by the technology, but by advertising and business people who said `what would we like to have? Let’s come up with a wish list,’" says David Porter, Cox’s director of New Media Advertising Development. "So the cable operators got together and said, `What can we do today? What is consistent and where can we get a baseline for some of these metrics?’" Cable operators consider the four datapoints phase one, but "they [are] the basis and foundation from which all the other metrics can be derived." Demographics "are certainly in our road map," Warren Schlichting, VP of new business strategy at Comcast, told us in April. Now that cable operators have been reporting their VOD results on a monthly basis, they are going back and taking a hard look at Hanlon’s longer wish list. Now On to Phase Two Comcast and other operators have been brainstorming about how to make On Demand advertising into a mainstream media buy. Last month the six major MSOs involved in the Innovations in Digital Advertising (ID!A) program, a cross-industry body formed by the DiMA Group, a consortium that promotes On Demand and interactive advertising, said they completed a draft of phase two, which they plan to firm up by Dec. 11. Among the group’s top goals is to make sure that MSOs are using the same definitions in reporting VOD usage. "There were differences in how technically they were handling the information and they’ve adopted an action plan to correct that anomaly," DiMA EVP Pat Dunbar says. "The goal is to have consistency now that they’ve agreed on these four datapoints." Based on Dunbar’s comments, MSOs seem to understand Hanlon’s frustration. The Id!A group is looking at "recommendations for the next level of detail," she says. "Even with the four datapoints, that isn’t yet really at the level of what people see with Internet measurement," Dunbar notes, "so there’s an expectation gap in terms of what the gold standard of what people would like to see." Comcast’s Thompson agrees. "All the MSOs are interested in providing more data and everyone generally believes that the strength of On Demand advertising lies in our ability to measure what’s actually happening," he says. "As soon as the data can be accurately collected and distributed and we can build some common metrics…we’re going to provide those to advertisers." While Dunbar is upbeat and says there’s "certainly been progress over where we were last year," she admits, "there’s miles to go before we sleep in terms of continued work that needs to be done." The Cox Alternative: Ten Is Better Than Four As with many other parts of the business, Cox appears to be ahead of the pack on VOD metrics. It’s offering ten datapoints, the most of any MSO, and its efforts haven’t gone unnoticed. Ad agencies’ gratitude enabled Cox to expand its ad-supported VOD offering FreeZone from San Diego to ten markets this year. Cox Media derived its additional six metrics by drilling down within the four datapoints. Porter developed this flexibility with Cox’s VOD reporting vendor Everstream. He’s also helping other MSOs figure out how to do the same with their VOD tech partners. "We can go onto more complex things like how many views happen in a particular daypart or at a particular geographic zip code. You can start to slice and dice it a lot of ways, but if you don’t have good data to start with, then all those other more complex metrics are going to be inaccurate," he says. He’s also reached advertising’s holy grail, layering on demographic and psychographic information using Claritas’ software. Cablevision Goes Beyond Too Cablevision, which started offering On Demand advertising earlier this year with its virtual car showcase, also provides more than the initial four datapoints, says Barry Frey, Cablevision’s SVP of advanced platform sales. "We’re able to detail a lot of exciting information on how viewers consume VOD and VOD advertising" such as requests for information. "While we can’t deliver very distinct demographic data, we deliver an array of usage data," he adds. "We can show engagement and not only quantity of time [VOD viewers are] spending, but other data indicating how they interact and react and engage with the products. That’s clearly what advertisers want." Music Choice is also offering richer data mining, helping it to attract big-name advertisers like Coca-Cola. While some provide enhanced data, problems remain. "They’re not necessarily doing it in a consistent manner," Cox’s Porter says. "For example, `duration’ is a real troublesome metric because one VOD vendor might include what we call trick play in the time when they report the duration, while another might not." And despite her optimism, Dunbar notes a hurdle for On Demand advertising that goes beyond metrics. "Most cable operators haven’t really dealt with large advertisers on a broad scale until fairly recently," she says, "so it hasn’t been part of their normal disclosure program to" share results. "They haven’t been focused on those large advertisers in a planning function in a cohesive way. So there’s a lot of structural business practices that have to evolve in order for the kinks to get worked out in the business plans." You’ve Come A Long Way, Baby Still, you can’t forget On Demand is an infant industry, operators say. Before Cox tapped Everstream, Porter was doing its VOD reports by hand—an onerous task that makes complaints about today’s four datapoints’ minimum seem laughable. "I would literally get a log file directly FTP-ed or transferred off a VOD server," Porter says. "I’d import that into Excel and just start counting rows…" Thompson of Comcast shares his pain. "A year ago, if anybody wanted data on Comcast On Demand you’d have to go into each of our 80-plus data warehouses separately, extract the data…then manually construct an Excel spreadsheet," he recalls. On average, "we would provide data to a programmer 45 days after a month’s end." Now with Comcast’s third-party VOD data vendor Rentrak, a programmer that has a relationship with Rentrak can get that data 1 or 2 days after the viewing occurred. Good thing, too. By early October, Rentrak had recorded an unprecedented one billion Comcast on Demand views so far in 2005. That’s a lot of spreadsheets. What’s Next for Rentrak? The On Demand and DVR measurement world will experience a major shift next year when ratings behemoth Nielsen Media enters the fray. That eventuality has many wondering about the future of VOD measurement firms Rentrak, Everstream, Atlas on Demand, erinMedia and TNS Media. Rentrak’s work with Comcast, Cablevision, Charter, Insight and Bresnan is complementary to Nielsen’s decision to add On Demand and DVR metrics, says Cathy Hetzel, SVP of Rentrak’s OnDemand Essentials. Still, she’s got a business to protect, having just signed 12 content providers (including seven Viacom-owned TV networks plus Paramount Studios). To that end Hetzel believes Rentrak must do more than report the four datapoints, so it’s pondering a Steve Burke favorite, "whole house" measurement. This incorporates VOD, DVR and other platforms (wireless and beyond) where video may travel. It’s also developing AdEssentials, a VOD reporting application that could help MSOs better address the needs of agencies and advertisers. "We can create, for example, a guaranteed number of impressions across a certain number of shows based on what we know about the target of those titles, and then measure on the back end how the performance occurs." —S.B.

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