ST. LOUIS – The fourth-largest cable operator in the U.S., Charter Communications, launched an experiment last week that dynamically rotates ads into video on demand content.
In the trial, ads are inserted into the VOD feeds as they are ordered by customers, meaning it’s basically a one-to-one communication. The St. Louis test (a 250,000-subscriber system) is also providing ad viewing data that allows advertisers to understand exactly how ads are viewed on a daily basis.
In the U.S., MSOs are hoping to be able to add a revenue stream to "free VOD" to make it ad-supported and dynamic ad insertion is the key because it’s a much more flexible and immediate concept than adding and encoding ads into a VOD stream, embedded within the content file itself.
In Canada, advertising in VOD content must have appeared at least once on a conventional or specialty channel and MSOs are not allowed to sell ads in this fashion. While advertising flexibility is on the agenda in the upcoming TV Policy Review, VOD ads are likely to be beyond the scope of this proceeding.
"For On Demand to grow and attract premium programming it needs to be an ad-supported model," said Todd Stewart, corporate vice-president, national advertising sales and development of Charter Media, the advertising sales division of Charter Communications.
The trial is a collaborative effort integrating C-COR’s nABLE On Demand Ad Insertion solution with Atlas On Demand’s automated campaign management, ad decision logic optimization and reporting tools, TVN’s ad distribution system, and content from Hollywood.com and Vehix to bring to market a complete real-time On Demand advertising solution from the ad agency desktop to the video-on-demand (VOD) system. The trial includes national clients from OgilvyInteractive and Mediaedge:cia.
"The ability to dynamically track and measure On Demand ads will attract more advertisers to On Demand and generate new revenue opportunities for operators," said Joe Matarese. "Dynamic On Demand advertising is a best of both worlds solution as it puts the viewer in control of television while giving the advertiser maximum control over the placement of creative content."
