Cable Operators

How VOD Ads Measure Up

3/21/2011 12:01 AM Eastern

Cable customers adore
video-on-demand. The industry
served up some 8 billion VOD transactions
— amounting to 3.5 billion
hours viewed — in 2010, according to

But operators and programmers
have struggled to wring advertising
dollars out of free VOD content. Some
technical obstacles are being overcome,
as MSOs roll out dynamic ad
insertion systems to be able to splice
targeted spots into a VOD session.

Meanwhile, on the business side,
perhaps the most critical issue right
now is that marketers don’t have any data to show them
how video-on-demand stacks up against the alternatives,
according to BlackArrow president Nick Troiano.

“Free VOD is a real medium for how consumers are experiencing
television content,” he said. “What’s been missing
is a research-based analysis of advertising in free VOD.”

Hoping to eliminate that blind spot, BlackArrow and the
4A’s, the ad-agency trade group, formed the Advanced Advertising
Media Project to study the effectiveness of VOD ads.

The project, dubbed AAMP for short,
is being supported by participants including
Comcast, Discovery Communications,
CBS, A&E Television Networks,
Digitas, Horizon Media, NDS Group and
Rainbow Media.

The three-phase Advanced Advertising
Media Project is aimed at testing,
measuring and analyzing consumer
perceptions of advertising within VOD
compared with traditional live TV and
DVR playback.

A first phase of the AAMP surveyed
about 20 industry executives to gauge impressions
of the state of VOD advertising.
“We identified a lot of frozen perceptions
across the stakeholders,” Troiano said.

The second phase, which is currently underway, involves
consumer research with a panel of about 1,000 people
scheduled to conclude by early June, with results to be
released later in the summer. The research is being conducted
in New York and Los Angeles by research firm Ipsos.

The AAMP consumer survey seeks to quantify ad effectiveness
across different demographics and ad categories,
with different ad loads and commercial lengths. A key focus
will be to compare advertising in VOD against both
live TV and digital video recorders. “It was really important
for the participants to see how people experience ad
effectiveness across all three of those,” Troiano said.

In a third phase, the AAMP participants plan stage a
field study to evaluate real-world results in a live, consumer
test with a major cable TV operator with potentially
multiple partners. The findings from phases one and two
will be used to develop the test parameters.

Mike Donahue, executive vice president of the 4A’s, said
ad agencies are “seeking clarification on how best to integrate
numerous TV viewing platforms into their media
buys and optimize value for advertisers.”

AAMP participants will get access to the research,
and the group intends to publish most of the key findings
(except for any confidential information), according
to Troiano.


The Advanced Advertising Media
Project’s multiphase plan:

1. Industry Expectations: Survey of 20-plus
media industry execs to determine baseline perceptions
about free VOD and ads (completed).

2. Consumer Survey: Survey of 1,000 consumers
to measure VOD ad effectiveness
using control and test groups (underway;
results expected midsummer).

3. Market Test: Evaluate real-world results
of VOD advertising with a major cable TV
operator (second half of 2011).


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