• by John R. Osborn , Op-Ed Contributor, May 4, 2015

Video-on-demand (VOD) is a benefit of a viewer cable subscriptions, but still not front and center in the television ad model discussion. So where does it stand as an ad medium today? I had a chance to find out in a snapshot experience when my family forgot to DVR the first three programs of of the final half-season of “Mad Men” on AMC.

With a bit of dread from previous VOD viewer experiences, we turned to Time Warner Cable’s Entertainment on Demand AMC listings, and hit play. The first hurdle was finding out whether fast-forwarding would be disabled, which is a deal-killer in my home. And wonder of wonders, fast-forwarding is enabled! So on we were carried into the Madison Avenue advertising world of spring 1970.

Here’s the formatting time line of my 55-minute experience. Ads are in boldface:

0:00 – 0:30: Single pre-roll ad for Capital One Venture (:30 Total)
0:30 – 20:00: “Mad Men” program including “previously on” and opening credits (19:30)
20:00 – 21:30: Three-unit ad pod: Jack Daniels (:30), Geico (:30) and CarMax (:30) (:90 Total)
21:30 – 29:00: “Mad Men” program (7:30)
29:00 - 30:00: Two-unit ad pod: Fan Duel (:30) and AMC “Turn” promo (:30) (:60 Total)
30:00 – 37:00: “Mad Men” program (7:00)
37:00 – 38:30: Three-unit ad pod: JCK Daniels (:30), Jet Blue (:30) and Fan Duel (:30) (:90 Total)
38:30 – 44:30: “Mad Men” program (6:00)
44:30 – 45:15: Two-unit ad pod: Deleon Tequila (:15) & Fan Duel (:30) (:45 Total)
45:15 – 45:17: Transitional (:02) billboard for AMC program “Turn” (:03 Total)
45:17 – 51:17: “Mad Men” program (6:00)
51:17 – 52:17: Closing credits (1:00)
52:17 – 52:47: One unit “post-roll” ad for Fan Duel (:30 Total)
The remaining 2:13 is accounted for by ad-loading latency, lead-in and lead-out time and a margin of error on exact timing due to reading minutes rather than seconds on the video player.

Observations
-- The total VOD non-program content load for this 55-minute show is at 3:48, a most reasonable 6.3% of total program length. Compare this to linear television, which commonly packs 20 minutes of non-program content into a 60-minute program, or a most unreasonable 33% of viewing time.
-- By allowing fast-forwarding, AMC and Time Warner Cable provide a far superior viewer experience, and even got a bit more ad-viewing from me than they would have on linear DVR playback. For instance, when I did fast-forward, the play/pause functions did not jump me back to the start of the program. I found myself rewinding and ended up watching about 10 seconds of the last ad, along with a few seconds of the first ad.
-- Dynamic ad insertion is here. While measuring these pods, I sometimes “timed out” on the pause function, and when I returned, rewound and replayed the content. A new ad was then inserted into the position that I had paused on.
-- A larger and more diverse set of advertisers are participating in VOD. A few years ago, I would see the same ad, or often the same network promos, again and again within a single program.

What it means
–- When ads do interrupt VOD content for only 90 seconds maximum, it is much more tolerable to a viewer than the sometimes 5-6 minute pods seen on linear television. Does anyone really believe that human beings are actually watching all the ads in those super-pods?
–- Avoiding the strategy of “forcing” viewers to watch ads (by disabling fast-forwarding) can counter-intuitively create more ad viewing.
–- I am glad to see that dynamic ad insertion technology has finally arrived. Advertisers get more reach and less viewer wear-out across a schedule, and viewers are not bombarded with the same message over and over again within a single program.
–-A larger and more diverse number of advertisers indicate that the buying side is waking up to the value of VOD as use of dynamic ad insertion increases.
–-The first :30 pre-roll seems like a pretty sure thing as far as viewability, given an audience’s previous digital experience with video pre-roll. As an advertiser, I would pay a high premium for that VOD unit.
–- Who will cover the current cost/revenue differential for shorter ad pods? I believe the revenue difference should be addressed by both advertisers (higher CPMs for greater value for less ads) and content providers (no longer charging for the mid-pod ads that go unseen). Overloaded ad-formatting was created over time by both advertisers and content providers. As the digital world figures out viewability standards, this rebalancing is a necessary element for television to stay competitive with the accountability of digital video advertising.