The U.K.’s Virgin Media has completed a three-month trial of on-demand advertising, using SeaChange International’s AdPulse product. The trial proved that the technology works. But with subscribers 54 percent positive about the ads, the remaining challenge is to make the business model work.

AdPulse inserted advertisements pre- and post-roll in a number of different programs transmitted to 100,000 customers in north London. The results were compared with a control group in a different location with similar demographics, said Simon McGrath, chief marketing officer for SeaChange. (For the initial announcement, click here.)

"All in all, the response was very positive," said McGrath. And of the 46 percent of respondents who weren’t positive, he said, "they weren’t turning off."

Since its launch in 2007, Virgin Media’s TV On Demand service has become extremely popular in Britain with audience levels nearly as high as the two top broadcast networks. SeaChange announced yesterday that it has signed a new four-year contract to provide content management services for Virgin’s VOD service. (For more, click here.)

"The big challenge for cable companies who’ve put money in VOD infrastructure is to now monetize it," said McGrath.

Although the AdPulse trial was deemed a success, Virgin hasn’t made the decision to deploy the technology yet.

"If they move forward, the challenge is not going to be technical or operational," said McGrath. "It was key to reduce technology and operational risks. Now the question is the business plan."

Although AdPulse has the capability of inserting ads in interior program breaks, the Virgin trial only inserted before or after programs.

McGrath said interior breaks add more complexity than the Virgin test was designed for. "You need rock-solid standards about how those breaks are marked against metadata or digital marking within the assets themselves," he said. "There aren’t sufficient standards.

"SeaChange was keen to establish whether the technology could be stable, whether there was a hunger for the advertisers and agencies in terms of having this additional source of revenue, whether the introduction of ads would turn consumers off. There was a mixture of objectives. One was not to test interior breaks."

AdPulse is commercially deployed at Sunflower Broadband in Lawrence, KS, said Howard Rubin, senior product marketing manager at SeaChange in an interview earlier this year. Sunflower initially deployed dynamic placement of advertising into on-demand programming in 2006. (For more, click here.)

 McGrath said other tests of the product are being conducted on "four continents."

– Linda Hardesty

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