Eager to assist programmers and cable operators who want video-on-demand systems to generate ad revenue, VOD server vendors are working on next-generation software that will allow dynamic ad insertion in VOD content.
Until now, most ads appearing in VOD programming are weeks, if not months old. In many cases, ads are “hard encoded” into the programming at the production source, possibly 30 to 45 days before the program hits a VOD server.
For anything other than image spots, the ads are out of date by the time a consumer views the programming. Movie studios can’t trumpet theatrical releases and stores can’t tout discount specials.
In short, any advertising that is time-sensitive is effectively rendered meaningless.
ADS ON THE FLY
Dynamic ad insertion would change all that.
A step beyond digital ad insertion, dynamic ad insertion would allow operators to place advertising inside VOD programming on the fly, at the moment a subscriber places an order.
Advertisers could send new ads each week — or every day — to be inserted based on a predetermined trafficking schedule.
The ability to dynamically insert ads could go a long way toward obtaining the best TV content for the on-demand platform.
Executives at both SeaChange International Inc. and nCUBE Corp. say their companies have initiated dynamic ad insertion trials.
“A year from now, you will see a lot of these things really jelling,” said Jay Schiller, senior vice president of market development at nCUBE. “We will be in the middle of a number of real-world trials.”
While VOD and linear digital ad insertion share some similarities, the new application is infinitely more complex. “Instead of 48 channels across 10 ad zones, you have to deal with 100,000 potential streams,” said Joe Ambeault, director of broadband systems at SeaChange.
Two forms of VOD advertising exists today, according to Ambeault. “The first is inserting brand-centric ads,” such as generic automobile ads, he said.
The second is long-form advertising, called up by subscribers just like any other piece of VOD content.
Those are not embedded into a program — they stand on their own.
“The limitations are that the ads have to be hard-coded in there,” Ambeault said. “They need to be evergreen.”
New ad insertion requires the entire program to be re-encoded, a costly and time consuming process.
In theory, VOD catchers could splice in MPEG-2 ads, but current catchers aren’t robust enough to handle that kind of potential traffic load. “They are already handling signaling from the satellite,” Ambeault said. “To change ads you have to redistribute and reimport the content. That may be good for localism, but not for ad rotation.”
Manual insertion is possible, he said. “You could have a content prep station, and when the content hits TVN [Entertainment Corp.], In Demand [LLC] or the Comcast Media Center you would have an operations person sit with the content and edit in the new ads.”
But that has some drawbacks, too. “You have to put in workstations and manually do it with people,” Ambeault said.
The answer, according to nCUBE and SeaChange, is dynamic ad insertion.
“Dynamic ad insertion is a blend of VOD and linear ad insertion,” Schiller explained. “You need a set of tools. The content and spots are all on-demand content. We’re creating a set of tools to splice ads into programming on the VOD server.
“You need some mechanism to identify where the spots go,” he said. “It could be cue tones or cue metadata. Cue tones are more challenging to detect on the VOD server. Cue metadata might be easier.”
Both SeaChange and nCUBE are developing software trafficking programs that would handle the placement of ads in VOD streams at the moment the content is streamed from the server.
BUYING ON SCHEDULE
For instance, a toy manufacturer might buy a schedule on Cartoon Network or the entire kids VOD package. The VOD content would contain either cue tones, like the Society of Cable Telecommunications Engineers’ SCTE 35 standard for digital network ad insertion, or cue metadata, signaling where ads should be inserted.
Once a subscriber orders VOD programming, the attendant ad software system would match up any spots that should be running there and place them in the VOD stream as that content streams out of the server.
Each ad would have its own metadata — just like any other piece of VOD content. That metadata could include information about what programs the ad should be inserted in or what ZIP codes the spot should be sent to. “You can do it by category, program, network and the ZIP code,” Ambeault said.
“A media buyer might say: 'I’ll take Blues Clues for the week before Christmas and I want it to be exclusive,’ ” he said.
New England viewers might see ads for sleds, while viewers in California might get spots hawking remote control cars.
SeaChange has developed a new trafficking system specific to VOD. “We’ve created a simple reservation system,” Ambeault said. “The software will direct who the pod is owned by. The ad is sitting there with its delivery instructions in the metadata. It’s then a matter of consulting the databases on what to do.”
Ambeault said the new software will work on every SeaChange VOD server shipped since 1998.
Former Concurrent Computer Corp. VOD division president Steve Necessary believes “bumpering” — or placing ads before and after VOD content — to avoid the need for cue tones might be the starting point. “That’s more of a playlist implementation,” he said.
Concurrent’s purchase of Everstream Inc. provides it with some in-house expertise in VOD ad insertion playlist software, according to Concurrent chief technology officer Bob Chism. “The playlists will have rules engines. You can move video files back and forth across servers.
“The real effort is to open as many of these interfaces as we can, and open up session management at the edge. That allows for the overlay of server vendors,” he said.
All in all, it’s a lot of work.
“A typical VOD system generates four to six million transactions a week,” said Ambeault. “The transaction volume goes up by however many pods you put in the programming. That’s where we’re focused. We have the server part done. The hard thing is just operating the business in an efficient way.”