New York — Greater data transparency and easier-to-use
navigation are among the factors that could unlock the true
value of on-demand advertising, according to a panel of industry
experts.
There is no question of
VOD’s popularity — 7.8 billion
on-demand transactions
were accessed by consumers
last year and each year,
the number grows. But, according
to Rentrak president
of advanced media and information
Cathy Hetzel, 74%
of those transactions are free.
While that means that the biggest
revenue opportunity lies
in selling advertising on the
service, Hetzel, speaking at
last week’s On Demand Summit
3.0, said the industry needs to be more transparent in the
way it presents its data.
“This really is the only platform in any kind of media that
has absolute census-based measurement — every click of the
remote from every single cable and satellite operator is available,”
Hetzel said. “The measurement is there, now we just
have to open it up.”
Hetzel added that companies like her own, which extract
large amounts of information from set-top boxes,
have to share that information with ad agencies and advertisers
to show them the power of VOD. Second, Hetzel
said that measurement companies like Rentrak have
to integrate themselves into the buying system — particularly
with data-processing services like Donovan Data
Systems, Media Bank and
Strata, which process media-
buying transactions
for agencies.
Cox Communications
senior vice president of
brand marketing, advertising
and social media Joe
Rooney said the customer
experience will be an important
factor in driving
VOD success: particularly
an ability to navigate
through VOD offerings
more simply.
The pay TV industry
could take a lesson from its online competitors like Netflix,
Rooney said.
“If you think about your own experience as a consumer,
there is really terrifi c navigation through some of the online
activities that you do,” Rooney said.
Rooney said the industry is making headway with iPad
and Android apps that turn tablets into high-tech remotes.
Cox, he added also is embracing social media on the recommendation
front.
“Having friends recommend to friends is really powerful,”
Rooney said.
Kevin Smith, group vice president of integrated media
sales for Comcast Spotlight, said that the evidence
points to viewers migrating to the VOD platform in growing
numbers, but the business model hasn’t quite caught
up with it yet.
“The business model has to evolve between cable operators
and network partners to facilitate deployment,” Smith
said. “The traditional business model has become complex.”
Dynamic ad insertion — the ability to place different ads
at different times for different customers in a VOD stream
— has long been thought to be the Holy Grail for VOD. And
though it has been slow to catch on,
Smith said that once
advertisers actually see it in use, it becomes an easier sell.
Smith said that Comcast is conducting VOD trials which
include dynamic ad insertion in Richmond, Va., and Pompano,
Fla., with multiple cable nets to show programming
partners just how effective VOD can be in selling products.
The response from advertisers has been very enthusiastic,
Smith added.
BlackArrow president Nick Troiano said that the industry
may need to step back a bit and figure out where VOD
fi ts into the landscape.
Troiano added that the industry needs to know how to
sell VOD advertising like a product, and package and present
it to advertisers and agencies accordingly.
Smith had an even simpler solution.
“Follow the impressions,” Smith said. “Agencies buy
impressions.”
