Marketing

Erin Gives Nielsen Run for its Money

6/03/2005 8:00 PM Eastern

Bradenton, Fla.-based media-research company erinMedia LLC has quietly entered the cable-advertising space, pitching its research and analysis software to ad agencies, clients, programmers and MSOs in an effort to get video-on-demand ratings off the ground and ad dollars flowing to the medium.

The company employs advanced database technologies and proprietary intellectual software to analyze second-by-second viewing statistics from hundreds of thousands of advanced set-top boxes. That data is combined with the census of digital cable households, plus other data on audience behavior, size and demographic composition for agencies and clients.

The company has conducted a number of trials with MSOs, analyzing data from more than 100,000 homes, in an attempt to move VOD advertising forward.

The chairman of erinMedia is Frank Maggio, a Florida real-estate developer who invested in the company in order to get an earlier venture, ReacTV — which develops programming embedded with reactive advertising — off the ground.

Maggio said in order for VOD advertising to grow, agencies and clients will want to see usage data mining built into set-top boxes, that data collected by a second party, and then analyzed by a third party. It’s that third role erinMedia is vying to fill.

“We’ve talked to the biggest ad agencies in the world, and the best currency has the most firewalls,” Maggio said. “We measure a census. We do data analysis. We’re the science behind the set-top box.”

Companies like Target TV, Scientific-Atlanta Inc., Open TV Corp. and Navic Networks, which have worked with Maggio’s firm, collect VOD data, then turn it over to erinMedia for analysis. ErinMedia looks at aggregated data across thousands — if not tens of thousands — of homes to determine who watched what in VOD, whether they fast-forwarded through commercials, and other viewing habits.

For instance, early returns show that 15-second ads relevant to the VOD content being viewed get watched by the large majority of consumers, said erinMedia president Frank Foster.

Whether a consumer watches a VOD ad depends on several variables, Foster said, including structure, length, position, content correlation, product appeal and the creative quality of the ad.

“The ad model can be adjusted and can yield different numbers,” Foster said. For instance, ads for National Football League merchandise inside an NFL VOD segment “can be very compelling.”

“We’re a quantitative-analysis company,” Foster said. “We provide the ammunition for advertisers.” The more homes in a survey sample, the better information and analysis erinMedia can provide.

All erinMedia wants, Maggio said, is a slice of the spending programmers and agencies give to companies like Nielsen Media Research, to help write the rules for the new medium of VOD.

“The data and analysis has to be taken on a census approach,” Maggio said, not from a 5,000-home Nielsen people-meter sample. “We have to have access to capital to provide that level of detail. I’m throwing the gauntlet down,” he said, to convince companies to fund erinMedia’s research in this new area.

In Maggio’s mind, the broadcast networks have the most to gain from VOD, since they only have one revenue stream. Adequate VOD ratings would allow broadcast networks to put their best programming on VOD and generate a second revenue stream. In some cases, two strong shows often face off against each other, he said. VOD would allow the audiences to see both, at their leisure.

Foster said erinMedia has spent the last 12 months working closely with agencies, media buyers and media planners to understand their VOD ratings needs going forward. The Cable & Telecommunications Association for Marketing On Demand consortium work also has helped.

“This is a complicated problem,” he said. Those parties involved “are working hard to figure out a solution.” But he also urges companies to “stop talking and start doing, if we want VOD to move forward. There’s going to be a point in time where everyone is going to say: 'Let’s go.’”

Curiously, erinMedia got its start in 1999 as a research project inside of Cheetah Technologies Inc., which manufactured network-management systems and status-monitoring equipment. Cheetah required the collection of information into data warehouses, which eventually led to the creation of erinMedia.

Foster and company developed the software in the early part of this decade, with an eye towards the VOD market. Maggio entered the picture in 2004 with $14 million in cash and the desire to give Nielsen a run for its money in the new VOD platform by providing an analysis of viewership information for agencies.

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