Commentary

TV, The Internet and VOD Advertising: It's All About Choice

In an recent Video Insider, Eric Franchi wrote about the slow uptake of video as an option among DRTV advertisers. His argument, that marketers are still trying to "unlock the code" to make advertising in online video work, is spot-on, and the conclusion -- that the direct-response model we have now doesn't translate online -- resonates.

There was a time when the TV was basically the only place in your house where advertisers fought for your attention, but that has changed. Today marketers must include cell phones, PDAs, and Internet-connected laptops and desktops as they consider the best outlet for sales generation. TV, much less video, looks less and less appealing. After all, networks have slowed ad spending by 4% in Q2 2008, while local broadcast spend dipped 6.1%, according to the Television Bureau of Advertising. Online advertising is challenging TV ads with significant growth -- 15.2% during the first half of 2008, says PricewaterhouseCoopers LLP.

But while the Internet offers convenience and cell phones offer ubiquity, nothing beats the quality of the TV viewing experience. As Franchi observes, "nothing engages like sight, sound and motion." Time-shifting technologies like DVRs and video-on-demand offer consumers new ways to watch TV on their schedules. DVRs and TiVo have played a role in decoupling advertising from traditional delivery channels, introducing time-shifted viewing alternatives to consumers weary of appointment TV. By enabling viewers to separate TV viewing from network schedules and advertising, DRTV has done more than change the length of ad spots; it's also changed the nature of brand and relocated the center of gravity between marketing message and ROI.

Now advertisers must think deeply about the nature -- and channel -- of interaction with consumers to come up with advertising that makes sense in time-shifted TV. Marketers seeking to connect with consumers must select ad formats and delivery platforms that value results over branding. There is a lure to the quick-hit pull of online ad clicks, but video systems offer similar response mechanisms and reporting capabilities. What will it take for marketers to look to video?

Video-on-demand (VOD) advertising is becoming a viable alternative. It presents consumers with marketing messages and choice, and it has presence -- Forrester estimates it's available to 75% of digital cable subscribers in the U.S. VOD also supports a variety of ad formats, from the familiar embedded ad spots to ad overlays, bookends and long-form, on-demand "showcase" ads that deliver information and interaction.

The final piece of the puzzle for advertisers considering DRTV is an AdWord-type clickable link between traditional ads and showcase ads. Available today, this functionality represents an advertising model that makes sense for viewers and advertisers.

DRTV advertising using VOD ties together the interaction of the Internet, the location capability of the cell phone, and the content of cable and TV operators. It delivers relevant content, at the right time, to the right viewer, with advertising messages that link interest, intent and action.

DRTV/VOD Advanced advertising systems can "unlock the code" by including recommendation engines and social-media style components that will increase viewer choice and advertiser synergies. Technology is available now to bring Web browsing functionality together with the data in a viewer's VOD directory or cable box, enabling advertisers to target, to the zip code, viewers whose viewing history indicates receptivity to messages. Social media elements of the technology let viewers recommend programs -- and products -- to their friends and contacts. Those viewers who make the investment in recommending TV content to their personal networks are more likely to pay attention to the advertising that is embedded in it.

In 2009, addressability may be the missing link that ties viewer choice to advertiser content, to serve ads according to program genres that viewers actually want to watch. With innovation and understanding, marketers and advertisers can make video and DRTV a viable path to the consumer.

It's time to turn on the TV again.

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1 comment about "TV, The Internet and VOD Advertising: It's All About Choice".
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  1. J.d. Miller from Strata Marketing Inc., March 2, 2009 at 4:19 p.m.

    I really appreciated your article “TV, The Internet and VOD Advertising: It’s All About Choice”. We at Strata feel the future of AA with VOD is tremendous and are proud to be leaders in this field. Please see the recent press release below:

    COMCAST LEADS THE WAY IN
    ADVANCED ADVERTISING WITH STRATA

    CHICAGO, IL. (February 3, 2009) - Strata Marketing Inc. continues its forward thinking in advanced advertising by giving media sellers a pair of new opportunities for their clients to reach their customers. Strata is the industry leader with its full suite of software for an end-to-end connection between media buyers and sellers.

    Strata offers unprecedented accuracy and detail for advertisers through their premier searchable database of cable video on demand (VOD) assets. The database, called Strata One Source (SOS), now allows media sellers the ability to search available VOD content using search criteria including date/time, genre and/or keywords in order to locate VOD assets which best suit their sales needs.

    Advertisers can place pre-roll or post-roll commercials on VOD assets based on the advertiser’s target audience and genres. In essence, providing the ability to drill down to the best suited assets for their customers needs while providing information all in one place. These results can be exported to Strata VIEW32 as part of an avails package or print reports.

    Already on board with Strata’s advanced advertising initiative is Comcast Spotlight, the advertising sales division of Comcast Cable, which has begun using the new technology.

    According to John Shelton, Strata President and CEO, “Ad agencies could be the biggest winner. In a complex media world, advanced advertising for VOD gives agencies a portal in evolving media opportunities for both them and their customers.” Strata’s SOS has approximately 6,000 paid sales side users that could benefit from this advancement in technology.

    “As the leader in digital media, we are pleased with Strata’s integration of traditional linear programming and VOD,” says Hank Oster, Senior Vice President and General Manager of Comcast Spotlight. “Streamlining processes makes it more efficient for buyers to leverage cable’s unmatched capabilities and reach and for us to present our clients with the end-to-end solutions that enable them to reach their market segments across multiple platforms.”

    Strata is also making strides into new digital media capabilities with the internet. They will allow cable account executives to drill down to particular website pages and look across media for their client to purchase category specific advertising.

    Strata's software also helps clients buy all media types including cable, broadcast, newspaper, radio and outdoor more efficiently. Within a short time, Strata has become a dominant name in customized media management with steady growth, proven products and increasing market share among agencies of all sizes, and now works with nearly half of all media buying firms.

    Strata Marketing, Inc.
    The whole-scale changes that are occurring in this fragmented media landscape require a customizable and convergent solution with the technology to enable organizations to lead rather than react. Strata transforms businesses in a way that adds efficiency and precision across traditional and emerging platforms at the scale media clients demand. The company has earned its esteemed reputation by consistently leading new innovations in the field and diligently serving its clients for over 25 years.

    ####

    Links: www.stratag.com
    www.comcastspotlight.com

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