How Can I Run Ads On Connected TV When I Can't Figure Out How To Program My VCR?

by Lewis Rothkopf, Sep 22, 2011, 4:45 PM

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Remember the 1980s meme about how hard it is to program a VCR? I never really understood that. Setting Thundercats to record when I wasn't going to be home always seemed like a fairly straightforward proposition -- start time, end time, channel, done.  

But so insidious was this apparent difficulty that a system was developed to abstract out the whole "start, end, channel" business: a "Plus Code" was assigned to each show and published in programming guides. One simply entered the corresponding code into his VCR and boom, done.  

All that work, just so that consumers could watch what they wanted, when they wanted to.  

More than two decades later, people still grapple with the same core problem -- is the content I want to watch available? Is it free? How long do I have to wait after it airs on broadcast to watch it online? Right now, the best place to watch content, ranging from UGC to super-premium broadcast shows, is on a computer or mobile device, both of which have well-established monetization models. Video on the web continues to scale at an amazing pace and mobile video is growing strong.  

But what about on-demand television content? The battle for the living room is still in its earliest stages. Advertisers have begun to express interest in IPTV (aka connected TV) content, but such inventory just isn't available at scale yet. It will probably continue to be a niche offering until we see: 

•   A winning device. Best-case scenario here is for a ubiquitous smartphone or tablet to extend itself into a connected TV device. Several Android phones will plug in to a TV today, and many will stream media to a TV using the DLNA standard. Consumers can use a device they're already familiar with, and which already has a thriving ad ecosystem. 

•   Free content, lots of it, and without offline subscription requirements. What's currently missing is a vast library of premium content that is wholly ad-supported and that doesn't require subscription to the corresponding cable TV service. Lots of content is available today on a pay-per-view basis, and even more is available with a paid subscription, but options for super-premium, ad-supported content on connected TVs are limited.  

•   MSOs open their ecosystems to inventory aggregators. Cable and telco operators own the living room today, and they would benefit from outsourcing their unsold ad spots to networks and exchanges that are expert at monetizing content ranging from niche to broadcast. The efficiencies this would likely create could enable operators to tap into a new revenue stream and even freeze rate increases (or shift some of that spend to their faster broadband options). This would reduce the risk of cable customers "cutting the cord" -- while maybe not a large-scale problem yet, consumers' appetite for a la carte content has persisted since the earliest days of the medium.  

As an industry, we want to help marketers reach consumers across each of the screens in their home through a single, integrated buy. In order to get there, it will take changes to hardware, monetization models and content windowing. These changes will lead to more diversity, accountability and creativity in video advertising.

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0 comments on "How Can I Run Ads On Connected TV When I Can't Figure Out How To Program My VCR?".

1. Brian Hayashi from ConnectMe 360
   

   commented on: September 22, 2011 at 5:11 p.m.

   You almost had me until the very last point. Could you show us how inventory aggregators might benefit MSOs to the point of freezing rate increases? Yes, there are tremendous opportunities to maximize revenues from spot advertising. But freezing rate increases? Show us how this helps manage NFL licensing costs without future clawbacks and your argument will seem more credible.

2. Todd Koerner from e-merge Media
   

   commented on: September 22, 2011 at 7:20 p.m.

   That's why Apple is developing its own television. It will bring together all its devices via iTunes. Don't you read Business Week?

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