Ad buyers have a clear message for cable: "Show us the metrics, and we’ll show you the money." By Shirley Brady Starcom MediaVest’s Tim Hanlon wants more from Brian Roberts. More data, that is. Last month, Roberts told the American Association of Advertising Agencies’ annual Media Conference in New Orleans that Comcast was ready to start supplying VOD usage data to advertisers and their agencies. Given that the biggest cable operator is on track to record 1 billion VOD streams and deliver 10,000 hours of VOD content by the end of this year, the 4As’ members were eager to listen. Fourteen months earlier, at the 4As’ conference in Orlando, the group’s advanced television committee put forward guidelines listing discrete types of VOD viewing reporting and measurements. The group’s members needed the guidelines to start creating a real business around VOD advertising. Hanlon, SVP at Starcom MediaVest and chairman of the 4As committee, was underwhelmed with Roberts’ plan. Comcast would start reporting four data measurements monthly: the number of VOD-enabled set-top boxes in a DMA; 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. Advertisers and agencies would not be charged for the reports. And each VOD content provider would receive program-specific reports for its own content, not Nielsen-style rankings showing its performance vis-�-vis others. Comcast’s commitment was not nearly enough to get advertisers to support VOD, Hanlon said. "My real issue is that the four data points that Comcast has thrown out there—and has effectively asked other operators to join in on—are still nowhere near the data sets that we’re going to need," said Hanlon. "The [number of VOD-enabled set-top boxes]—that’s helpful. I still don’t know what a `view’ is…A view is just the start of a video stream; 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." Even Roberts acknowledged that Comcast’s move to provide measurements within 10 days of each month’s end was a first step (albeit "a big step"). Roberts knows that Comcast and its brethren in the cable industry have a long way to go before they’ll meet the demands of advertisers and their agencies. In particular, advertisers want operators to work with Nielsen Media to deliver the kinds of metrics that will quantify the return on their investments in VOD advertising. They want demographic information about individual users, not about set-top boxes. "We need more than monthly data," Jon Mandel, chairman of the MediaCom media-buying agency, said on a VOD advertising panel at the National Show in San Francisco earlier this month. "We need specific data." "Demographics are certainly in our road map," said Comcast Spotlight VP Warren Schlichting, who heads up Spotlight’s VOD ad sales. He said that Comcast’s goal in this first phase of data points "is uniformity as opposed to granularity." It’s incumbent on Comcast to create and describe to the industry the next phase of data points, he added. "We’ve got to get timely and precise data out to everybody that has any stake in the VOD platform." Schlichting is eager to get this first phase of data working smoothly before adding more metrics to the mix. "It’s our goal to continue to shorten the gap between month’s end and when the data gets disseminated, and then also to standardize across the four data points that Cox, Time Warner Cable and ourselves have put forward," he said. "We do need to show we can do that on a very consistent, very regular basis." Hanlon credits Schlichting for admitting that what’s going on is a retrofit of a system that was designed for movie delivery, in which the beginning of a movie is just a billing event. "It’s just [that] the reason that we put out those guidelines [last year] was to give people something to aim for," Hanlon said. "I look at what was announced in New Orleans by Brian as a very welcome step forward, but we’ve got a long journey yet to go." Airing Grievances in San Francisco Like Mandel, Hanlon attended the National Show to sound a wake-up call to the broader cable industry. His eagerness to bring his clients’ ad budgets to cable’s VOD platforms has been met mostly with frustration. "We’re no further along than we were three years ago," Hanlon said, speaking as a member of a panel on VOD programming. "It is challenging to convince advertisers that VOD is an ad-supportable platform when we don’t have anything close to reasonable metrics. We have not begun to figure out what the ad pieces look like—short form, long form, 30-second spots—and we are in the middle of a scrap between local ad salespeople and national ad salespeople over who gets what inventory." Still, Hanlon tipped his hat to Comcast "for being most aggressive in this space." Despite his frustrations, his firm was placing more ads in VOD than any other agency. "We are just as bullish and optimistic as anybody," Hanlon added. "That said, there is a lot of disagreement even within all of the major cable operators about what local versus national looks like, how much data we’re going to share or not share, the business model issues." To make matters worse, that dirty laundry is being aired in front of his clients. "There’s some discord that’s going on within organizations, and that frightens advertisers away," Hanlon said. "They’re saying, `We’ll come back a little later once you’ve figured it out.’" The stand-off is critical given that advertising is expected to underwrite and create the business model for free VOD programming, which TV networks big and small are being asked to give to Comcast. Comcast’s long-standing FVOD-only programming partners Nano TV and Concert are bringing advertisers into VOD ahead of any business model. "We continue to explore the best possible advertiser/viewing experience with 20 months of programming under our belt," said Concert co-founder Michael Shimbo, referring to his Coca-Cola sponsorship that his West Coast-based business partner, Jeff Shultz, helped craft with Starcom. (The graphics for Coke’s product integration, designed by Shimbo and his team in New York, are elegant.) Other programmers wading into the VOD space are champing at the bit to learn more. National Geographic Channel EVP of marketing Steve Schiffman entered the VOD advertising arena in January, when Visa ran a first-quarter test using NGC’s on-demand content in Comcast and Time Warner Cable markets. "We want to…be able to drive a really intelligent message that resonates with a viewer and to drive value to an advertiser," Schiffman said. "And we want to make sure that the viewer experience in watching VOD is not tarnished or derailed in any way by using this platform in a more traditional, commercial way." Consensus on the Horizon? Clarity in the VOD advertising space might be closer at hand now that CTAM and CAB have decided to end their turf wars. They’re eager to do more than just share their VOD advertising insights—they’re laying down arms to create an ad-centric business model for VOD. As Rentrak EVP Ken Papagan, who has a vested interest in seeing any infighting resolved, said: "The level of cooperation is unprecedented and historic." The cable industry’s own On Demand Consortium, a CTAM initiative, last year partnered with CAB to develop baseline metrics for VOD advertising. ODC chairman Channing Dawson, SVP of new ventures for VOD ad pioneer Scripps Networks, said that this group will create a sustainable business model for VOD by the end of 2005. If not, he’s ready to concentrate on strutting his own networks’ best stuff for broadband using Scripps’ Internet-proven metrics and ad model. The CTAM and CAB co-venture has some help. The ODC shares members (such as Comcast Spotlight’s Schlichting) and the heavy lifting on crafting a VOD ad model with the cross-industry trade group ID!A. Dawson and Hanlon work with ID!A, as do their fellow VOD advertising designated drivers including representatives from cable operators, TV networks (broadcast and cable), tech vendors such as Tandberg and SeaChange, the CAB (its CEO, Sean Cunningham, is a member) and—most importantly, since everyone’s trying to make them happy—advertisers and agencies. Two years ago ID!A was formed as an offshoot of the DiMA (Digital Media Advertising) Group. It quietly has been exploring potential new ad units defined by, and unique to, the VOD platform. "We’ve been looking at areas where all [the member] groups can help move the ball along. We have three areas of focus: the ad units, metrics and measurement and then what’s called ad information or meta-tagging," said Pat Dunbar, DiMA/ID!A principal and organizer. Dunbar is optimistic that formal industry guidelines blessed by Madison Avenue will emerge from this effort. The group is polling advertisers and agencies for their opinions on the proposed ad units to determine which ones will have the greatest consumer appeal and which could be utilized within the next 18 months. "Together we’ve all come up with a list of the top five things that we really want to make happen over the next year and a half," said Tandberg Television VP of content and advertising Raj Amin, who chairs ID!A’s content standards committee. "If there’s all different kinds of proprietary ways to do things, we’re never going to move things forward. So we’ve got to pick the things that we want to implement and then standardize those things and make sure that an advertiser can create that ad once and deliver it to every platform, whether it’s DVR or VOD or using a Navic interface or Scientific-Atlanta." Advertisers don’t care how it’s done, he added. They just want standards to produce cost-effective VOD ads and then measure their success on a level playing field. That’s when "everyone can get paid," he said. "Then we’ll have a business." Zaslav Complains About Cable’s Free Lunch NBCU Cable president David Zaslav is a programmer with considerable clout. He oversees the Olympics, top-rated networks and a deep, rich library that he’s ready to share—at a price, of course. So when he says he is tired of being asked to produce "virtual channels" of VOD-only programming by affiliates not willing to pay him in return, we listen. "We’re not getting fees, we’re not getting specific real estate and we have to deal with the advertising" issues, Zaslav said on the VOD programming panel at the National Show. He bemoaned the VOD-triggered toppling of the time-honored model of launching networks (and actually making money) that’s been used over the past 25 years. Zaslav even went so far as to suggest that operators remove "one or two" linear networks that aren’t performing and replace them with a VOD channel instead—a bold offer from a programmer with growing networks of his own. The fact that Time Warner Cable EVP of programming Fred Dressler, with tongue firmly planted in cheek, volunteered to do so on the spot showed that old friends like these, even while on opposite sides of the issue at this point in the nascent VOD business, eventually will craft a model that will work for everyone. —S.B. 4As’ VOD Measurement Wish List In February 2004, the American Association of Advertising Agencies’ advanced television committee released a list of VOD measurements they wanted. Those metrics included: Source: DiMA Group/ID!A Innovations in Digital Advertising

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