A Suit With a View: Igniting VOD: Dynamism and Measurement, Not Targeting, Are The Keys - Jonathan Bokor - MediaBizBloggers

Welcome Jonathan Bokor our newest MediaBizBloggerWith Video On Demand on pace to reach 5 billion views in 2009 and the majority of those coming from the free on demand category we39ve come to the point when there39s enough inventory upon which to build a meaningful advertising business But cable and telco operators having already built fairly expensive VOD systems have not taken the next logical step of putting a viable advertising platform in place to monetize VOD WhyOne of the biggest obstacles has been the misguided focus on household level targeting as the key feature of a VOD ad system Showing each viewer a targeted ad that39s relevant to him or her and thus eliminating the inherent quotwastequot in TV advertising has long been a tantalizing dream for marketers If advertisers could send their messages to only those viewers they deem likely customers and avoid having to pay for showing that message to customers who likely won39t buy then the ROI on their ad buys would markedly increase If so they should be willing to spend more on the medium that enables that increased efficiency and pay a higher CPM to bootThe problem is that the complexity involved in building a VOD ad system capable of household level targeting is widely underestimated While the SCTE 130 standards represent a good start they only address part of the problem amp8211 the management and playout of the targeted ad within the system operator39s plant Too little attention has been paid to figuring out the nittty gritty selling processes amp8211 campaign management inventory management sales orders billing etc These processes become so much more complex when you39re splitting up an ad avail to sell it on an individually targeted basis and none of the current solutions for linear TV advertising can easily be adapted to handling these tasks for VODMeanwhile Rome burns Although VOD views are rising steadily it still takes about 30 days to put an ad into VOD content and the measurement data provided to ad agencies remains fairly thin As a result the dollars being spent on VOD advertising remain almost negligible At the same time online video ad technology is improving with a large number of wellfunded startups building ad technologies that are far more sophisticated and flexible than those built for VOD Ad agencies have come to view online video as a superior platform and are putting far more money there than VODThe solution for VOD is to simplify simplify simplify Household level targeting adds a great deal of complexity so stop focusing on it for now and begin thinking of it as something to be phased in down the road Dynamic ad placement which essentially means splicing the ads into the content at the moment the subscriber hits the quotPlayquot button and better measurement are far more important in the near term By cutting the lead time for placing an ad in VOD from the current 30 days down to one day or less dynamism would allow ads to be swapped in and out quickly making VOD far more flexible timely and efficient Marketers that have short lead times and want to advertise at very specific times amp8211 movie studios for example would be able to meet their needs with dynamic VOD ads which they can39t do todayBetter measurement is the other critical piece that needs to be put in place The data currently being provided to ad agencies just aren39t good enough While it would be great to have a much wider variety of data available simple demographics would do the most to attract more dollars Most linear TV is bought based on demographics Agencies only pay for the number of viewers within their desired demographics and effectively aren39t charged for the other viewers so they39re already doing a crude form of targeting They pay a higher CPM just for that demo even though in reality their ad is shown to the entire audience Enabling VOD ad buyers to buy based on demographics and to do so on a dynamic basis so that they can buy specific day parts will match linear39s crude targeting ability and should be enough to get agencies to begin buying VOD in earnestMake no mistake even adding dynamic capability and some additional measurement data will not be a piece of cake and it won39t be cheap New systems for managing and selling inventory generating sales orders billing and a host of other functions will still be required but these systems will be far easier to develop and operate without adding the complexity of household level targeting By simplifying the task to just implementing dynamic ad placement and delivering some key measurement data monetization of those 5 billion VOD streams can begin in earnest Comcast39s recent announcement of its deployment of BlackArrow39s dynamic ad system in Jacksonville appears to add these capabilities It39s about time but to succeed this deployment needs to be replicated across the entire cable footprint and fastJonathan Bokor is a consultant specializing in monetization strategies and business development for both digital media and traditional media companies Jonathan can be reached at jbokoryahoocomFollow our Twitter updates MediaBizBlogger

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A Suit With a View: Igniting VOD: Dynamism and Measurement, Not Targeting, Are The Keys - Jonathan Bokor - MediaBizBloggers

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