Verizon Communications plans to launch a television ad-sales operation in the first half of 2007, and it hired a former MTV Networks sales executive to run it.
The telephone company -- which launched its first television service, Verizon FiOS TV, in September 2005 -- hired Jason Malamud, former vice president of affiliate advertising sales and marketing for MTVN. His task is to help Verizon grab a piece of the $60 billion spent each year on television advertising.
Of that, $15.7 billion went to cable networks and spot TV in the first six months of this year, according to TNS Media Intelligence. Verizon will most directly compete with cable-television system operators for local ad dollars.
But Verizon’s ambitions extend to regional and national advertising, as well.
The Verizon effort plans to try to turn television advertising into a “direct marketer’s dream,” according to Malamud. The initiative will take advantage of the data collected in TV set-top boxes on when viewers join and leave programs in order to provide marketers with precise understanding of viewership in its systems.
Turning TV into a direct marketer’s medium is only one piece of Malamud’s plan. He also intends to experiment with advanced interactive technologies to find new ways of delivering advertising on television networks and take advantage of Verizon’s technically advanced network. That infrastructure takes fiber right to the side of customers’ homes, which means it is attaching more bandwidth to those homes than cable operators.
Done right, he believes Verizon will be able to tie advertising on conventional TV programs with libraries of commercial material available on-demand and deliver more data on viewing habits and TV transactions to advertisers than has been possible to date.
Malamud began working at Verizon after the July 4 weekend, and the company will announce his appointment as VP and general manager of Verizon FiOS Media this week.
The Verizon ad-sales team will be small. Malamud is currently looking to hire two corporate ad-sales managers, one of which will be assigned to analyze business opportunities. Later, toward spring, he is likely to hire two more managers to work with rep firms that will actually handle the sales of local and regional advertising for Verizon.
The sales to local and regional clients will actually be handled by companies that specialize in advertising representation. Verizon will rely on these third parties to sell the ads, keep track of them and bill the advertisers. The company is installing local-ad-insertion equipment at video hubs in each market it serves.
National ads will also be trafficked and billed by third parties. However, Verizon will try to find partners among national advertisers that are interested in experimenting with new forms of promoting their brands and products on digital-television systems.
For more on Verizon FiOS Media, please see Tom Steinert-Threlkeld’s story on page eight of Monday’s issue of Multichannel News.