For a content provider making the shift, the typical first step is to launch an application. It should be accessible over multiple service provider networks by as many end-devices as possible. The number and velocity of downloads stands as a common currency. ESPN and the U.K.â€™s Channel 4 are examples of two content providers in the apps game.
Launched in August 2011, the U.K. based ESPN Goals clocked 1 million downloads within two months. It further reported that viewers had logged more than 61.3 million minutes, roughly translating to 30 minutes of viewing per person, per month. Much ESPN content is gated, but this ESPN Goals provides clips and goals from Barclays Premier League football matches on this app for free â€“ i.e, with advertising support.
ESPN Goals does attract advertisers. In October, ESPN announced that it had reached recent agreements with three leading consumer brands â€“ Electronic Arts, Continental Tyres and Mentholatum â€“ to run pre-roll video ads around the appâ€™s video clips. Pre and post-roll advertising is a small but growing category of mobile advertising â€“ search being dominant, followed by display. Like other networks, ESPN aims to cover the entire range of video-capable smart-phones.
Enhanced advertising is a priority for another player in the U.K. media, Channel 4, the broadcasting pioneer that launched the online VOD offering 4oD in December 2007. (Channel 4 is also one of the seven partners in the forthcoming YouView free-to-air platform.) Interactivity and targeting are big themes.
Ed Couchman, Commercial Controller for Future and Digital Media Advertising at Channel 4, says that one recently launched enhanced ad product allows viewers to engage in simple social functionality and get more information from within the ad, while another gives advertisers the ability to capture additional data. â€œOn the targeting side, we are the only U.K. broadcaster that can offer truly targeted ads on a one-to-one basis using our registration data. Weâ€™ve only just taken this to market and have already seen ICON pictures and Diageo take advantage of it.â€
The 4oD service features more than 5,000 hours and is available on multiple platforms and devices, including Channel4.com, YouTube, Virgin TV, BT Vision, Apple iOS, and Playstation 3, and soon to be available on Xbox and Samsung Connected TVs.
Couchman says that Channel 4 has helped educate the community around the PC VOD value proposition. The platformâ€™s â€œreduced commercial mintageâ€ and its largely young, up-market audience of focused viewers who donâ€™t watch much linear TV â€œmeans that ads really stand out.â€
ESPN Goals attracts advertisers
One thing advertisers want to see, however, is how a multi-screen spend provides an incremental reach to an existing TV campaign. â€œTo be able to do this on an ongoing basis,â€ Couchman says, â€œwe need one single measurement system for both TV and VOD.â€
Operators, Privacy and Apps
The other way for content to arrive on PCs and mobile screens is for network operators to make it available to their subscribers. The France Telecom unit Orange, for instance, launched 12 channels of mobile TV in 2005. Along with the T-Mobile brand of Deutsche Telekom, Orange is joint venture partner in Everything Everywhere, the largest mobile operator in the U.K., with 28 million subscribers. To a large extent, an operatorâ€™s delivery of content derives from technical capability.
â€œVideo advertising will represent a growing proportion of clientsâ€™ mobile advertising spend as more handheld devices now operate the required clock speeds, screen resolution and processing power to handle video,â€ says Barry Llewellyn, Director of Mobile Media and Advertising for Everything Everywhere.
Video itself may still be an advanced feature for some phones, but most mobile platforms are inherently able to address individual users. â€œTargeted advertising is one of the core strengths that mobile offers advertisers,â€ Llewellyn says. â€œEach connected handheld device and tablet has a registered personal user, and itâ€™s this one-to-one relationship that offers absolute granularity when it comes to targeting.â€
But getting close and personal â€“ something enabled by a SIM card-based customer relationship â€“ requires balancing competing interests. â€œThe MNO (mobile network operator) has the capability to define user groups by demographic, device, location and behaviour, but data security and privacy are key cornerstones in the trust relationship between operator and customer,â€ Llewellyn says. â€œThere is stringent governance in place to make sure push advertising and the commercial use of personal consumer data is always through permission from the customer.â€
Like Llewellyn, AT&Tâ€™s AdWorks VP IPTV Sales and Solutions Frank Foster underscores the primacy of the customer relationship, which means that attempting â€œsomething even remotely controversialâ€ is a non-starter.
â€œNobody wants to risk all the different sides of the business and the stakes they have with the consumer on something dumb that an advertising geek wants to do.â€ The upshot? Fosterâ€™s group simply does â€œnot do things that other people do on a regular basis.â€
Companies with traditional Pay TV services also have moved content onto additional screens. In 2010, Virgin Media launched its Player, making hundreds of hours from ITV, Living TV, Disney, Cartoon Network, National Geographic, Discovery and MTV Networks available on the PCs, laptops and mobile phones of its XL TV customers.
The popularity and video-friendliness of the iPad led several prominent U.S. cable operators â€“ Cablevision, Comcast and Time Warner Cable â€“ to make on-demand and live content from their line-ups available to subscribers who have downloaded their respective apps on Apple devices. â€œItâ€™s an easy step forward to be able to make that modification,â€ says Aseem Bakshi, Business Unit Manager and General Manager, Advertising at SeaChange, which provided multiscreen technology and managed service infrastructure that enabled Virgin to launch its Player. â€œThe variable factor is content rights itself, which is being hotly debated.â€
Whether moving from a single to multi-screen delivery is a simple task may be a matter of perspective â€“ the SeaChange task for Virgin initially involved providing content in nine video formats for adaptive steaming for PC and mobile endpoints. Technology companies, often ahead of the curve, tend to see such tasks as done deals; what remains in some cases, as Bakshi indicated, is legal resolution.
Advertising opportunities for platform operators with multi-screen offers depend on the deals with content partners
Comcast and Time Warner Cable co-launched their respective iPad apps in January 2011. The Comcast Xfinity app included on-demand content from 10 cable networks. In March, Time Warner added live streaming of 31 channels to its on-demand offering. Cablevision soon thereafter raised the ante by releasing an app that offered live steaming of 300 channels.
Dueling lawsuits between Time Warner and media conglomerate Viacom, and Cablevision and Viacom followed in April. The outcome of these U.S.-based launches indicates the true variability of this rights issue. Comcast launched slowly, with on-demand only, and appears to have attained all necessary rights. Cablevision met strong objections to its aggressive launch of live streaming, but in August 2011 reached a settlement with Viacom.
Authentication and Rights
In some cases, operators have struck separate deals to make premium content available to authenticated subscribers. Bright House Networks, Time Warner Cable and Verizon FiOS TV, for instance, agreed with ESPN to make shows, events and networks available to subscribers on their computers, mobile devices and Xbox Live consoles through the WatchESPN app.
Advertising opportunities on these additional screens depends on the capabilities of and agreements with the partner network. The WatchESPN platform, for instance, simulcasts six networks, inserting separate ads into each simulcast. An advertiserâ€™s decision to spend then approximates a traditional TV buy: Which segment of the ESPN demographic is your target? One difference being that online affords metrics and reports largely unavailable on TV. On the ESPN.com platform, the networkâ€™s customer marketing and sales service gives advertisers customization tools, including local geographic targeting, and campaigns that begin at sub-$3,000.
But what about the case of an operatorâ€™s online service offering? Can an operator sell that inventory? In the U.S., at least, the consensus is yes. â€œIf they can do the linear deployment and make it available on an iPad in the house, the immediate follow-on is that they can put different ads on that device,â€ Bakshi says. â€œLegality is associated not with the ads themselves, but with the content at all.â€
Given secure rights, online ad insertion is a logical next step for service providers. â€œThey might as well re-monetize. Thereâ€™s a serious amount of investment being made in the ability to re-broadcast in the first place,â€ Bakshi says. â€œBecause itâ€™s an IP device, the technology is in place for even more targeted advertising.â€
An advertiser-based extension to existing Pay TV content is a natural application of the â€œTV Everywhereâ€ market in the U.S., says Andrew Brown, VP Business Development and Commercials, at Alcatel-Lucent. (Brown participated in the Videonet-sponsored webcast, â€˜Winning at Multiscreen.â€™) â€œYou donâ€™t have to be overly clever about the Booleans or business logic about the targeting aspect, because you know whoâ€™s watching and at what time,â€ Brown said. â€œAdvertisers will pay for that privilege.â€
In other countries, the rules may be more restrictive. â€œIf you donâ€™t own the content, you canâ€™t do anything,â€ says Dr. Randolph Nikutta, Leader New Media, Innovation Development, at Deutsche Telekom Laboratories. â€œYou can provide them only with the enablers, like providing the triggers, the addressability of the second and third screens, and you can provide, of course, campaign management and delivery platforms.â€
One answer for service providers with the means is simply to acquire exclusive rights, as DT has done for football in Germany. In the case of DT, these rights are enabling its first interactive TV advertising campaign, which will be with Samsung, its top sponsor on the football channel. Nikutta admits that progress on interactive with the classical remote will be more limited than with the mobile device or tablet computer. â€œBut weâ€™re starting, and we control the value chain,â€ Nikutta says.
This is an excerpt from the Videonet report: â€˜Between television and digital: advanced advertising arrivesâ€™, published in December 2011. The report considers the state of advanced advertising across traditional and new platforms, and looks at developments in dynamic and targeted advertising for VOD. You can read the rest of the report here.