Targeted Advertising: A Call to Action

Television is the world’s most powerful advertising medium. However, there is another game in town – the Internet. The Internet serves more ads today than any other medium and is quickly catching up with cable in its ability to deliver a high-quality audio/video experience. Moreover, unlike television’s broadcast approach, the Internet enables a one-to-one experience between the advertiser and the viewer, allowing addressable targeting of the message.

Led by Comcast, Time Warner and others, the explosion of free on-demand services has ushered in a delivery model involving a one-to-one session between the video server and the viewer. It’s time to extend the value of this connection to the advertising community. Pressing questions Here’s the critical question: Can the cable industry match the Internet in its ability to target advertising messages before the Internet matches cable in its ability to deliver a high-quality TV programming experience?

There has been great interest from cable ad sales departments in the potential to deliver targeted addressable advertising, but relatively little success beyond some technical trials.

The best place to start is on-demand, targeted addressable advertising, because it already creates a one-to-one session from the server to the viewer. Then, as switched digital video (SDV) is deployed, it can benefit from many of the same infrastructure components that are required for on-demand. It comes down to taking advantage of the one-to-one relationship that cable TV is evolving to enable.

If the architecture for targeted addressable ad placement is based on open, flexible standards that separate the technical solution from the ability to manage ads with customers, the industry will have effectively evolved both the untamed nature of the Internet and the disparate, manually intensive ways of cable ad sales into a future where new revenue opportunities are not held back by yesterday’s technology decisions. Today’s world Broadcast linear TV ads are inserted at two places today: nationally at national uplinks where a master control operator monitors all inventory, traffic and verification; and locally, where local master control operators oversee timed insertions, driven by cue tones or digital program insertion (DPI) messages. The architecture is designed for point-to-multipoint transmission, and targeting is based on historical and projected audience ratings from third-party providers such as Nielsen.

The Internet is the exact opposite.

Internet ad pages can be served from anywhere in the world to any customer anywhere in the world, regardless of content. Content owners control sales through their contracts, but rely on their partners to fulfill ads in ways content owners never allow on television. Ads can be served on a volume basis based on number of impressions and can be targeted based on cookies and other information gleaned from the Web user.

On-demand TV (VOD, broadband TV and IPTV or SDV) has the promise to blend the best of both worlds. On-demand TV here is defined as any time a one-to-one session is set up between a viewer and TV programming. That might mean a standard cable video on demand (VOD) session, a piece of content watched via a broadband connection on a PC (YouTube, NBC.com, etc.), a channel viewed in a switched digital or Internet protocol TV (IPTV) unicast or video clips played back from a digital video recorder (DVR) or a mobile device.

Television’s quality of experience is unparalleled. A delivery system for executing ad placement orders should be the bedrock on which emerging standards are built.

The technical hurdles are different for each of the platforms listed above, but it all comes down to defining how to match content with the best customers with the most relevant advertisers. An open way to manage campaigns across platforms will allow advertisers to optimize their buys across the media that television now encompasses. A call to action There are five major areas where change is required to make on-demand, targeted addressable advertising a reality:
• Avail marking
• Campaign management
• Ad trafficking
• Ad placement
• Unified reporting

The vision for the future of TV advertising goes by many names, but it all comes down to this: Combine the addressability, real-time action and fulfillment strengths of the Internet with the power of television’s high quality audio/visual experience to create a powerful new business model that will generate enough revenue and profit to make all of the existing players in television happy (and their shareholders, too).

Some examples of this are:
• Ads dynamically placed in a VOD playlist (a series of program assets played back during a single session) when the subscriber orders a title
• Ads sold based on actual views, with data collected almost instantaneously from the two-way connection to the subscriber found in an IPTV or switched digital environment
• Ads played back from a DVR, targeted to both the subscriber and the time in which the program is watched
• Ads eTV-enabled to allow subscribers to interact with ad content and request more information

The dirty little secret of this convergence dream is that groups who have barely spoken to each other before now, groups found within all parts of the advertising chain from broadcasters to advertisers and operators, not only have to work together, but also have to build an infrastructure that requires an in-depth understanding of each other’s business.

And who are these two groups? Engineering and ad sales. Avail marking It’s been pretty simple in television. National spots are sold and trafficked nationally. Local cable ad sales are driven by an electronic signal or trigger usually sent twice an hour in the broadcast stream that tells the local cable system when to switch to a local ad avail and when to switch back. Simple cue tones have evolved to the more sophisticated world of DPI and SCTE 35.

An avail today is a finite block of time, say 60 seconds. (See Figure 1.) That avail creates a pod, which is filled by ad spots. Once that 60-second block of time is over, you switch back to regular programming. In an on-demand world, that block of time avail now can expand and contract more like an accordion. This is because the session is not broadcast based on time, but on what video assets are played. The pod can be filled with nothing or an infinite number of ads, depending on what is sold. Not only can these pods be filled by standard video ads, but eTV will enable subscribers to interact with the advertising in order to telescope for more information or make a purchase.

This means that in addition to knowing an avail’s location, systems must be able to look at more data sets to determine rules that drive ad placement decisions. Extensions to SCTE 35 are being discussed, and the DVS 629 working group is looking at how best to capture the messages that go with an on-demand avail. These messages include avail requests, subscriber profiles and other information required to make an intelligent placement decision. Campaign management Once you know where to place an ad, how do you sell against it? In the linear model, there are basically two owners of avails: the national broadcaster and the local operator. Both groups sell inventory to other brokers, be they agencies or interconnects; but because the ads are fulfilled at a given time at a given location, it’s all pretty simple.

The paradigm that all ad placements are driven by the technology that executes the order needs to be deconstructed. Television needs to migrate to centralized campaign management that can look at ads, programs and targeted customers (see Figure 2) in the same way the Internet does – as flexible objects and data sets that can be mixed, matched, targeted and reported on, regardless of the platform where ads are served, be it a TV set, a PC or a mobile device. In an on-demand world, owners will need to have access to their inventory to be able to make changes at the last minute to take advantage of a changing marketplace. Ads can be sold on an impression basis and replaced as needed, in order to place them against the most popular programs and take full advantage of space-based inventory.

This means that owners of avails need to have access, be able to make changes, expect that those changes will be fulfilled, and get reporting, all in a uniform way.

Note that DVS 629 defines the ad management service (ADM) and the ad decision service (ADS) in such a way that the standards could be expanded to other devices beyond cable TV. The DVS 629 working group has not limited its vision to VOD only. The emerging standards provide the capability to enable dynamic ad decisions to be platform-agnostic. Ad trafficking Preparing ads and programs for playback in a system is typically handled by the operator’s or broadcaster’s traffic department. Ad copy comes in as a videotape and is manipulated or encoded at the correct bit rate, set into the system and made ready. If the ad isn’t there, then a manual exception report is created, and an operator finds the ad and encodes it for playback.

This system works well in today’s architecture. It can be a logistical and operational nightmare when national advertisers are selling ads that need to be located at hundreds of sites (millions if the ads are played back from a DVR set-top box).

There needs to be a way to not only distribute the ads to these disparate constituencies, but also to identify ads on a national basis so you don’t have multiple copies of the same ad sold by multiple people. Some way for the advertiser to know that the ad copy is available for serving would be tremendously helpful.

Standard mechanisms for spot identification that go beyond the simple Industry Standard Commercial Identifier (ISCI) codes used today need to be fully examined and adopted. There also needs to be a unified process to create metadata for ads, much like the CableLabs specifications for programming metadata exist today.

Programmers, advertisers and operators may want to look at how best to centralize the management of this highly decentralized process. Making everyone comfortable that the ads that need to be placed are available to serve is step one in trafficking ads for the wide variety of on-demand platforms. Placement Technology is moving at such a pace that new devices don’t have to wait until the annual Consumer Electronics Show any more to be introduced to audiences. That means video is everywhere, and, consequently, so are advertising opportunities.

So how do we separate the ads, programming and targeting from the device to allow for centralized campaign management and localized execution of orders, regardless of whether it’s on a cell phone, a set-top box or a PC?

It comes down to defining the series of messages from the platform requesting the advertising opportunity to an ad decision server. This will allow the systems in place to best determine the most valuable ad that can be played to the unique subscriber requesting that unique program at that unique time.

This also means that data about the ads, programs and subscribers need to exist in systems and be defined in a common way across operators. Unified reporting If an ad falls in a forest and no one sees it, did it make an impression?

Measurement and reporting are probably the most important parts of the ad equation to the agencies and purchasers of ads because it’s how ads played are billed for.

But today’s VOD reporting varies wildly from server to server and from operator to operator.

In order to make unified reporting a reality, the industry needs to determine some simple answers to some not-so-simple questions.
• What is a play? If someone fast-forwards through an ad, is that a play? What if they fast-forward only through the last half? If they watch the ad twice, is that two plays?
• What constitutes a report, an affidavit?
• How will plays be logged across operators in a model based on number of views?

Making it all happen is one set of issues. Reporting on that opens a whole new can of worms. Bringing it all home At the end of the day, it’s up to the cable industry to get together on what the future will look like. There is a great deal of work being done today in many standards bodies, but the different constituencies in the advertising world – engineers, agencies, operators, programmers – will need to find common ground to ensure that all business needs are being met and that there is a sense of order in the ad universe.

The Internet developed like the Wild West; standards were never established. The most commonly adopted vendor solutions have become the "standards." Cable TV is civilized by comparison. TV doesn’t need chaos and anarchy thrown in the midst of the revolution we are seeing in the ad marketplace.

The existing SCTE bodies are riding the curve on the technical issues. Logistical and business processes are lagging behind. What will it take for everyone to just get along and make lots of money?

So what would the perfect world of advertising standards look like? Here’s one stab at it.

The best possible world is one in which there are flexible, open standards that define the messaging and architecture while not limiting what can be done based on technology that may become obsolete before it’s implemented. Standards must be flexible enough to allow creative solutions to flourish and not be constrained by technical hurdles. Just imagine If you have a notion of what ad sales people are like, just imagine a world where those creative types can be as wild as they want and sell anything they can dream up to nearly any targeted audience.

Imagine the power of addressability to the individual. This will require a solid foundation of messaging throughout the sales cycle from the agency buy through the execution of the ad placement and ending with standardized reporting methods. Think of a system that is driven by the management of the assets and campaigns as opposed to managing splicing an ad at a given time.

Imagine a world where there are simple ways to identify ads and avail opportunities and to commonly track media. Imagine a world where vendors can build the best systems and compete in a world where the best idea wins, not just the first de facto standard.

Imagine a world of targeted addressable advertising. It’s already a reality in the Internet space. But to reach the television screen, this revolutionary business technology requires unprecedented collaboration between ad sales and engineering. Specifically, it calls for action in the areas of avail marking, campaign management, ad trafficking, ad placement and unified reporting. If those steps are taken, this new world could be here before you know it. Michael Adams is VP, Systems Architecture, Tandberg Television. Reach him at [email protected]. Jonathan Bokor is VP, Business Development, at Tandberg. Reach him at [email protected].