Advanced Ads: Big Opportunities, Big Questions

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Btr Feature Art 3 7 2012The opportunities presented to the cable TV industry by advanced advertising are huge and exciting: Suddenly, it is becoming possible to reach targeted demographics on nearly a one-to-one basis. The viewers of those ads can be on any device and be virtually anywhere.

As attractive as that sounds, the revenue won't be easily won. That was proven by the biggest news in the advanced advertising sector during the past few months: The announcement that Canoe Ventures was radically scaling back the size of its operation and moving its emphasis from national and to local VOD interactive advertising.

However, the travails of Canoe is not the only story to pay attention to in the interactive advertising landscape. The ability to automatically find specific subscribers and their devices and to assure the advertisers and agencies that the mission was accomplished is a big job with many moving parts. Observers say the cable industry has reached a point at which the major pieces are in place. The industry now is entering an era of deployment.

Comcast has led the charge despite the demise of Canoe, which it owns with five other operators. "The biggest positive thing is Comcast's rollout of dynamic advertising across its VOD footprint," said Chris Hock, the senior vice president of product management for BlackArrow. "I really think that it has been a culmination of little hurdles and challenges that all are getting addressed and taken care of."

It would be a mistake to dismiss interactive advertising because of Canoe's problems. Indeed, the fact that the company reportedly is turning to interactive advertising on the local VOD level suggests that it is at the local level where the true potential lies after all.

The bottom line, though, is that local cable advertising is a monstrously complex undertaking even in the linear world. Layering interactivity on top of it just adds to the intense nature of the category. Great progress has been made. Tom Russell, the senior director of standards for the Society of Cable Telecommunications Engineers, said three families of standards -- SCTE 35, SCTE 104 and SCTE 130 -- are involved in interactive advertising. Each is a work in progress, and each is changing.

For instance, changes to SCTE 35 late last year are aimed at providing more segment control and management tools to fine-tune operators' ability to correctly place the ads. SCTE 104 is being tweaked to work most efficiently with the changes being made to SCTE 35. SCTE 130 also is being updated, and a recommended practices document about the suite's implementation is being prepared, Russell said.

Paul Woidke, the senior VP and GM for the advanced advertising division of Nagra and the principal of Working Group Five of the SCTE's Digital Video Subcommittee, agreed that the big pieces are in place. "The biggest thing is to take the standards and products created by the community and put them into deployment," he said. "My candid assessment is that there aren't huge roadblocks. It is now a matter of execution against the opportunities that are there."

The challenges go beyond the core technology. Jeff Brooks, the VP of business development for ARRIS, sees a big challenge in creating validation platforms in the new advertising landscape as a big future challenge. "Let's assume that I have enabled delivery to an IP device -- a tablet PC, a smartphone or to a television via OTT (over the top) -- and it happens to be in a [Nielsen] ratings home. If I don't have any way to measure the viewers that went to the other devices that I can layer back into the device that was the consuming one, the content owner's rating just got smaller. We have to build a system to aggregate all the ways they get to the content and to the ads."

On top of the traditional task of serving its own subscribers, cable operators clearly could play a roll in helping OTT providers using their networks to present the same type of interactive advertising to their viewers. It's unclear how this all will play out. One thing is certain, however: It will create another layer of complexity.

While the promise of advanced interactive advertising is apparent, the infrastructure isn't going to be complete any time soon. "There's always a balance, a push-pull between building the business case to drive new ad sales and the technology to support it," said James Brickmeier, Concurrent's vice president and general manager of video solutions. "There still is a little bit of an inchworm effect: a little bit of success followed by a little more work. It is not one continuous stream."

Carl Weinschenk is the Senior Editor of Broadband Technology Report. Reach him at carl@broadbandtechreport.com.
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