Taking Aim With TV Ads
Switched Digital Video Holds Promise As Platform For Targeted Ads
by Todd Spangler -- Multichannel News, 11/23/2008 5:00:00 PM MT
Switched digital video, a technology designed to conserve space on coaxial cable networks, could become the way operators dish out dozens of different ads to viewers watching the same live TV programs.
The original purpose of switched digital video was to let cable operators expand their lineups. It later became a launching pad for more high-definition channels and specialty content like in-language programming.
But switched video also provides a foundation for delivering targeted ads — inserted into live TV — that are more relevant to viewers. “We’re now seeing service providers look at switched digital video as a platform for advertising,” said Biren Sood, vice president of marketing and business development at BigBand Networks.
Switched video delivers certain channels to households in a serving group only when someone in the neighborhood requests it. That means more linear programming choices can be delivered in the same amount of space allocated for broadcast channels, because not every channel will be requested at the same time. The “oversubscription” ratio can be 2:1 or more, depending on viewing patterns.
How advertising fits in: Switched video systems inherently take a broadcast lineup and break it up for delivery over numerous serving groups. A 100,000-subscriber cable system, for example, might be divided into 100 different 1,000-household segments — each served by a different switched digital video server — which represent demographic groups that are finer-grained than today’s ad zones.
“Now you have a very natural target area that is smaller in scope, and you can now send more specific content to that serving group,” Sood said.
In addition, switched video technology can allow operators to effectively tap local ad avails beyond the top 60 or so networks for which they do ad insertion now. That represents an opportunity to generate advertising revenue from the “long tail” of linear television, said Greg Hardy, vice president of business development in Cisco’s Service Provider Video Technology Group.
“There are just not enough people watching some channels to justify building a whole ad zone,” Hardy said. Switched digital video “lets you reach more viewers with local ad insertion” by targeting spots based on viewer profiles.
Canoe Ventures, the joint venture of the six largest MSOs in the U.S., expects to introduce a “creative versioning” product in the next few months that will allow national cable networks to extend to their advertisers the zone-based targeting used by operators. If those channels were delivered via switched video, ads could theoretically be even more accurately targeted.
But it will be a long while before switched video ad insertion becomes mainstream, according to Harmonic vice president of business development and marketing communications David Price. “The ad agencies and the advertisers themselves are not interested in small numbers,” he said.
Until the concept hits critical mass, marketers will still target advertising based on the makeup of a network’s viewership, Price said. “Frankly I think 99% of switched digital video’s value is reclaiming the bandwidth.”
Another pitfall: The most-watched channels, which should return the most ad dollars, are not delivered via switched video today because that wouldn’t yield any of the bandwidth efficiencies that are the primary reason the MSOs are deploying the technology.
Operators will “continue to deliver their high-profile, highest-rated networks via broadcast,” said Tim Myers, vice president of product marketing for advanced-advertising systems vendor Visible World.
Once there’s a realizable business benefit in providing targeted ads through switched video, it will make sense for operators to move networks from the broadcast tier to the switched tier, said BigBand’s Sood. Ultimately, in a “switched unicast” environment, every subscriber could be sent a separate video stream. “We view addressability as a phased approach,” he said.
A competing approach for delivering addressable linear TV ads puts the decision point about which spot to show the viewer in the set-top box. In this scenario, a set-top agent splices in the appropriate ad based on a set of rules.
Proponents of using switched video to insert targeted ads, though, assert that the complexity involved in set-top-based addressable advertising is far greater than performing those functions in the network.
“The jury’s still out on which is better,” Cisco’s Hardy said. “But if you were going to do set-top switching, think about the number of different boxes the application must be certified in. If you do it in the network, you do it once and the set-top doesn’t care.”
Of course, delivering different ad versions to viewers watching the same program requires additional bandwidth regardless of the technique. For example, a recent Motorola demonstration using switched video to deliver spots aimed at four different demographic profiles required four discrete feeds of the channels in the queue.
But while there are more possible feeds that could be delivered over the plant, the probabilities underlying switched digital video still hold — that is, most channels won’t be in rotation, said Motorola director of product management Bruce Bradley. In addition, he added, a switched video system can scale back the number of different ad versions it serves if capacity becomes constrained.
Delivering Distinct TV Ads
11/24/2008Channeling the Future
11/18/2007Getting the Boxes to Align
07/27/2008High-Def Dash
01/13/2008Bright House Flicks On Switched Video
09/16/2008
