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If there was one moment at IBC that made me wonder whether advertising just might be moving into its long awaited “advanced” era after all, it was hearing a well-established television advertising technology supplier talk about Google DART.
As tech historians will recall, Google acquired DoubleClick for $3.1 billion (about twice as much as it paid for YouTube) in a deal that closed in March 2008. Two years later, Google retired the DART brand, renaming it DoubleClick for Publishers (DFP). In this case, the television ad insertion pioneer at IBC was talking about how to integrate with Google. That was significant by itself. That it did so using the old name, something technologists often do when their work antedate brand shifts, made me think that this has been in the works for a while.
As it happens, this particular company, SeaChange International, is one of many companies that have been adjusting in their portfolio to accommodate ongoing changes in video delivery and consumption. The reason such indicators are big is that, despite real deployments, the advanced advertising category remains boxed-in, especially in terms of targeting. Why so?
First, there are the decades-long patterns of ad-buying behavior that act as a drag on innovation. The heirs to the original “Mad Men” form more of a stable, if evolving, “ecosystem” than a volatile mix subject to revolution. Then there are the privacy concerns. For every thousand online users growing accustomed with ads that reflect their online activity, there are a few who find the practice invasive, and who might object even more loudly to finding themselves “targeted” by sophisticated marketers and data mining algorithms through the television screen.
On the other hand, despite limited degrees of freedom, the advanced advertising model continues to generate enthusiasm. All four experts on a panel discussion held at the NDS stand at IBC delivered bullish answers to moderator Chris Forrester’s closing question on prospects going forward. Videonet contributor Philip Hunter underscored something more valuable and narrow in his write up of this session (click here for more) namely: the point that Laura Gore of Zenith Optimedia made about smaller chunks of sliced-and-diced audiences being more affordable and thus attractive to smaller brands who so far have avoided television.
In other words, small brands may become a segment of early adopters, driving the emerging platforms. And emerging they are. As Nick Burfitt, an executive at media measurement company Kantar Media, mentioned during the panel, U.S. satellite operator DIRECTV recently launched its own addressable advertising platform.
The expectation was that DIRECTV would initiate its service in August or September 2011. That it has done so is a mild surprise. After all, a Wall Street Journal article on the topic in December 2010 aptly noted upfront that the targeted advertising category has been characterized by “years of promises and false starts.” But while the DIRECTV launch has been quiet, the operator is clearly looking for business, as this company pitch indicates:
“DIRECTV will deliver scaled, household-addressable advertising to customer households with DVRs. We will provide our clients the ability to address highly relevant advertising messages, including the right to be the first to identify the audiences that best fit our clients’ needs for addressability.”
Scale is a key word. With DVR penetration at about 60 percent of DIRECTV’s subscriber base, its addressable footprint numbers about 11.5 million households. NDS’ UK customer BSkyB, with 10 million subscribers, has trialed a similar platform that turns its base of DVRs into mini ad servers; it expects to take it to market in 2013.
On the cable side, Kantar Media’s Burfitt mentioned research by US cable giant Comcast that associated greater viewer engagement with targeted ads. As it happens, this week Comcast also announced that its advertising arm, Comcast Spotlight, has handled more than 1,000 interactive advertising campaigns with more than 2.7 billion impressions to date. Not necessarily targeted, the campaigns have fallen into three types: requests for information (RFIs), remind-record, and video-on-demand (VOD) telescoping.
Given this service provider activity, one might be faulted for calling this market slow moving. True, there has been movement. There also is a large deployed base of local (arguably targeted) and standards-based ad insertion equipment working in incumbent service provider networks. Yet the pace for advanced advertising, especially which targets households if not viewers, is being set not by the satellite or telco or cable industries but rather by online players such as Google and related Internet technologies.
In that respect, the move toward HTTP-based video bears mentioning. As operators work with technology providers on HTTP-based adaptive bit-rate (ABR) streaming techniques to deliver video to any number of IP endpoints, the question of how to translate advertising insertion arises. As Edgeware CMO Duncan Potter said: “There is no concept of a session with ABR.”
A related challenge for moving forward is what Joe Matarese, ARRIS VP and GM for ARRIS Media and Communications Systems, called “zone parity.” In other words, consistency between ad zones for the iPad and television. One solution is to combine the ABR equivalent of sessions with targeting information. “Insert information into a stream of fragments and then get the zone specifics,” Matarese said.
Matarese said the standard interfaces to advanced advertising elements such as ad decision managers (ADMs) and the placement opportunity information service (POIS) would still apply. The point going forward is that choices would be even less static.
The aforementioned Google Dart (or DFP) example of integrating elements from Internet advertising into the advanced advertising framework for television is a case in point. “The question becomes what revenue to share,” said Aseem Bakshi, SeaChange VP of Engineering for backoffice. “This content could go to this ADS; that content, to that ADS.”
Thus, even as advanced advertising deployments get underway, the technical landscape is evolving again. RGB Networks CTO Youval Fisher, who sees a future for all-HTTP-based video networks, anticipates some disruptive shifts in advertising technology. “You just need an HTTP server. No longer an ad splicer, with some intelligence,” he said. “It becomes standard and less expensive.”