• by Wayne Friedman , March 4, 2014

CBS is starting up the selling of advertising via video-on-demand programming through “dynamic ad insertion” to marketers.

Through dynamic ad insertion, TV commercials on VOD services can be swapped out and new TV commercials inserted into programming after a three-day time period -- thus significantly adding new advertising revenue for the network.

Typically, virtually all national TV advertising revenue comes from traditional linear TV programming deals pegged to the C3 metric -- average commercial ratings plus three days of time-shifted viewing. Networks have been pushing for advertisers to pay for all TV viewing beyond the three-day period -- including that of TV programming delivered via its linear TV network.

For its VOD efforts, CBS is working with Canoe Ventures and its partners -- which include Comcast, Time Warner, Cox Communications and Bright House Networks.

Network TV advertising sellers have been touting the revenue generated by dynamic ad insertion for some time. One estimate says revenue from dynamic ad insertion amounted to $150 million in 2013. Projections indicate that the business could grow quickly to around $1 billion a few years.

Jo Ann Ross, president of advertising sales at the CBS Television Network, stated: “Our advertisers recognize the value of delayed viewing both in terms of sheer volume and the quality of the audience it delivers. Having the ability to switch creative copy in a significant portion of this footprint makes VOD an even more attractive option for clients moving forward.”

“With the launch of dynamic ad insertion we are unlocking new and valuable on-demand inventory for our advertisers with added reach and flexibility,” said Marc DeBevoise, executive vice president/general manager of entertainment, sports and news of CBS Interactive.

With this effort, CBS looks to grab not just new advertising dollars but younger TV viewers whose behavior increasingly leans to time-shifted programming .