• by Joe Mandese  @mp_joemandese, October 13, 2008

In a first-of-its-kind test of a new ad-supported online video distribution system, students at some of America's leading universities will get to watch premium TV shows from Paramount's Showtime network for free. The programming, including series like "Dexter," "The Tudors," and "Californiacation," normally are available only to subscribers who pay monthly cable or satellite TV fees, but they are being made available for free to students who agree to watch ads on a the new online service, Kazam, being tested at schools such as New York's Columbia University, and Indiana's Perdue University. Among the advertisers participating in the test is online insurance broker Esurance, which struck the unusual sponsorship deal as part of a series of meetings its media shop, MPG, held with a variety of interactive vendors in New York several weeks ago.

"It's very nice to get people in a room to talk about things and to hear about all the opportunities out there. It's another thing to actually make something happen," says Steve Lanzano, COO of MPG, says of the deal, which was one of a half dozen similar deals to be sparked during the agency's so-called Televisual Day, and from one of its periodic Collaborative Alliance meetings.

"Our hope is that is some of these tests hit, we will be able to roll them out and bring them to other clients," he says."

Other deals that have grown out for the mid-September meetings include an advertising buy for MPG client Volvo on the rollout of News Corp.'s NDS interactive TV navigation system, new research on interactive and addressable TV advertising with Axciom for MPG auto insurance client AIG (American International Group).

The projects come from the first in a series of meetings and collaborations being organized by Mitch Oscar, who joined MPG earlier this year after several years of doing the same kind of industry building at Carat. Among the 200 people attending September's Collaborative Alliance meeting were executives of rival agencies, including MediaVest's Jen Soch, Zenith Matt Feinberg, and even Carat's Shari Anne Brill. The goal of the "open source" approach, says Oscar, is the ensure that people in the industry - even competitors - share experiences and the results of successful tests to help pave the way for other interactive TV advancements.

The Kazam deal is a perfect example. The college online video programming service, which was developed by Intercast Networks, was already in talks with a couple of agencies, including Omnicom's OMD and Publicis' Moxie Interactive, when MPG brought Esurance to the table for this fall's rollout.

Intercast had already tried a limited, non-ad-supported test of Kazam last spring, and based on encouraging results, opted to rollout a more ambitious test this fall with some big advertisers.

The spring test found college students spent an average of 48-minutes per viewing session with Kazam, indicating that it might be a ripe advertising medium, given the relatively desirable demographics college kids represent for some marketers.

"They very quickly analogized it to a TiVo-like viewing experience," says Linor Tal Levav, vice president-content strategy and acquisition at Intercast.

Levav says the power of the system is that it utilizes the so-called Internet2 infrastructure found on many advanced college campus Internet backbones. That infrastructure allows data providers to "multicast" content in a more efficient way than via traditional "unicast" networks, enabling them to deliver bandwidth-hungry content such as high-quality video programming at times when servers and browsers aren't maxed out with other higher priority data. The concept isn't new. It's been around for at least ten years, but still hasn't found the kind of commercial marketplace that would enable to create a material business model for the ad community. But because the Kazam system also enables programmers to feed relatively personalized content to users - say an episode of "Dexter" for one student, or a Discovery Channel show for another, or even a Sports Illustrated swimsuit special for a third - it also allows advertisers to feed "contextually relevant" advertising messages to those users when and where they may have the most optimal effect.

"The nice thing about our platform is that we serve the ads from storage, so we can serve them in great quality, high-definition, and we can combine features like targeting and interactivity and data feedback," says Intercast's Levav.

As a result, the Kazam service can create a personalized programming and advertising experience that is customized for each user based on their profile, their user behavior and the context of when and where they are viewing the content.

"It's a very personalized experience," says Levav, noting that advertisers can rotated creative executions to build on storylines and to make sure an individual user isn't receiving redundant campaigns that might wear-out quickly. She says the advertisers Intercast have been working with are experimenting with different advertising lengths, formats and creative approaches to see what is most effective, but that the system theoretically has unlimited possibilities, with as many as 10 or 20 individual pieces of creative per advertising flight.

To date, she says, other than Esurance, most of the marketers experimenting with Kazam have been brands in the entertainment category, including film marketers showing trailers for upcoming movies.

While it still is considered a test, Levav says the Intercast team believes Kazam ultimately will be primarily an ad-supported service, because, "because the vast majority of students want to consume content and don't want to pay for it." But she says that for the right type of premium content, Intercast believes there also is a market in which consumers will pay for the programming too.