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Comcast: VOD Ads ‘Not a Test’

8/01/2011 12:01 AM Eastern

After years of trials, errors and false
starts, ad-supported cable video on demand may finally
be on the cusp of becoming a real business.

Comcast has deployed dynamic VOD ad insertion in 17
markets, running ads from Chrysler, Kraft and several local
advertisers across content from five NBCUniversal cable
networks: USA Network, E!, Syfy, Bravo and Oxygen.

While the capability doesn’t cover all of Comcast’s footprint
— the MSO said it’s going to roll it out nationwide in the
coming year — the ads represent real advertising revenue.

“This is not a test,” Marcien Jenckes, Comcast’s senior vice
president and general manager of video services, said. “Th is is
an actual rollout of a mature product that is effective at making
[VOD] monetization happen on par with the other platforms.”

Dynamic VOD ad-insertion systems provide the ability
to place any ad in any piece of VOD content, whereas traditionally
ads in on-demand content have to be encoded
into the video asset before distribution to operators.

Comcast Spotlight, the MSO’s advertising
sales division, is selling dynamic
VOD ads to local advertising
clients as well, including South Florida
McDonald’s; nTelos, Richmond,
Va.; Virginia Credit Union; WBBTTV
in Richmond.; and Batteries Plus.

Comcast has been working with
ad-insertion vendor BlackArrow
— in which the operator holds an
equity stake — for several years.
Initially, the operator’s system can
place ads that run prior to and after
a show (pre- and post-roll ads) with
dynamic ad insertion in the middle
of a program (mid-roll ads) set to come online later this year.

Comcast’s first partner is NBCU, a corporate sibling.
Next year, the MSO expects to extend the capabilities to
other networks as well as through Canoe Ventures.

Jenckes suggested Comcast might go live with additional
programmers sooner: “We have actually
been working with a whole range of programmers
to launch this into the market.
We will be out there with other networks
and programmers in the coming weeks,”
he said.

As for who sells the ads, Jenckes said
the arrangements are the same as with
linear TV: The programmers sell their
own ads for the most part, and Comcast
negotiates either a revenue-share or secures
part of the inventory.

The main message he wanted to drive
home was that Comcast’s VOD advertising
capabilities are now in the same
league as linear TV and online video.

Some research has found online video
ads are, in fact, more effective than those
on TV. A study by online video advertising
vendor YuMe and IPG Media Lab in May
found online ads have higher engagement
than TV ads. Online ads had 1.8 times the aided recall and
1.5 times the unaided recall of TV ads, while about 63% of TV
impressions were ignored, the survey found.

But with VOD, Jenckes pointed out, viewers have chosen
to watch a specific show or movie, and they’re choosing to
watch it on the biggest screen in the house as opposed to the
lean-forward environment of a PC or mobile device.

“Historically, programmers are very good at monetizing
their linear content and their online content — but not so
much on VOD, which kind of made VOD a third platform,”
he said. “We’ve been working hard to make it a monetizable
platform.”

Down the line, Jenckes added, “as we roll this out to our
full footprint, this gives us the opportunity to create even
more value with addressability.”

AD BREAKS

DETAILS OF COMCAST’S INITIAL DYNAMIC VOD AD-INSERTION DEPLOYMENT:

Networks: NBCUniversal’s USA Network, E!, Syfy, Bravo, Oxygen


Advertisers:
Kraft, Chrysler, local advertisers

Initial Markets: Philadelphia; Miami; New York; Boston; Burlington,
Vt.; Washington, D.C.; Baltimore; Richmond, Va.; Roanoke, Va.;
Detroit; Indianapolis; Jacksonville, Fla.; Orlando, Fla.; Naples,
Fla.; Nashville, Tenn.; Mississippi; and Huntsville, Ala.

SOURCE: Multichannel News research

September