Survey: VOD’s Potential Is Untapped

5/16/2011 12:01 AM Eastern

New York — Media executives believe video-on-demand
advertising is hampered by a
lack of established business
practices — while they also
remain bullish on VOD’s opportunity
for growth and viability
as an ad platform.

That’s according to a survey
of industry influencers
conducted by the Advanced
Advertising Media Project,
presented at last week’s On
Demand Summit 3.0 here.

“We heard a consistent expectation
of growth for VOD
[advertising] — everyone
was excited by it, but knew
we needed to overcome some
challenges to get there,” said
Carl Fremont, Digitas executive vice president and global media
director, in discussing the first phase of AAMP’s research.

Digitas is a member of the AAMP research initiative
to study the effectiveness of advertising in free video-ondemand.
The group was formed by ad-trade group the 4A’s
and BlackArrow, a provider of VOD-advertising solutions.

The first phase of research was based on interviews with
20 media-industry executives, mostly conducted in the fall of
2010, designed to establish a baseline of industry perceptions
related to dynamic VOD advertising.

According to the survey, the executives said dynamic ad
insertion for VOD — while not a silver bullet — was crucial to
expanding the segment’s reach.

“For the future of ad-supported VOD to be as bright as some
analysts predict, business as usual cannot continue. We need
to change the paradigm” by introducing dynamic ad insertion
for VOD, Fremont said.

Ineffective marketing of VOD to consumers is also an issue,
the AAMP survey found. Video-on-demand services need to
be packaged as a product and marketed to both advertisers
and consumers in ways that highlight the unique qualities of
the VOD medium, Fremont said.

“Some consumers don’t know what VOD is,” he said.
In addition, there’s a persistence of “frozen” perceptions
that VOD is not an attractive
ad platform, especially
among ad-agency executives.

The AMMP survey further
showed the need for
metrics that advertisers
can rely on to understand
the value of on-demand
placements. There is limited
visibility into consumer
awareness and usage of
VOD, as well as reactions
to advertising in an on-demand
context — indicating
the need for better research.
“Agencies want better insights into VOD viewing,”
Fremont said.

Fremont called on industry stakeholders to engage in the
AAMP initiative. “The future of VOD as a major media and
marketing platform is waiting to happen,” he said. “The question
is, are we willing to act on it?”

The 20 executives interviewed in the AAMP survey were
from such companies as A&E Television Networks, Cablevision-
RASCO, CBS, Combe, Comcast, Digitas, Discovery, Fox,
General Motors, Interpublic Group, Mediasmith, MediaVest,
NBC Universal, Rainbow Media and Starcom.

AAMP’s second phase, to begin in the next few weeks, will
involve consumer research with a panel of about 1,000 people,
employing a VOD research lab that “explores and validates
consumers’ responses” when engaging with advertising
in simulated VOD versus traditional TV environments.