Eager to monetize its on-demand business, Charter Communications has rolled out nationally a new category for its on-demand service. The category, called iWant More!, is devoted to long-form advertising and is similar to what Comcast offers advertisers with the Comcast Spotlight section on video-on-demand and what Cox has done with its Free Zone category.
Charter’s entry into the long-form VOD ad space is an indication that such an offering is becoming an increasingly important part of an operator’s on-demand service. It’s one of many ways operators can make money on their VOD offerings; others include fee-based content such as hit movies. A long-form ad section offers an opportunity for advertisers to develop a VOD presence, which is vital as viewership becomes more time-shifted, and for multiple system operators to sell additional new advertising formats to national and local advertisers.
In May Charter tested the category in its Monterey Park, Calif., and St. Louis markets through a 10-week trial. Charter chose those two systems so it could test the service on both Motorola and Scientific-Atlanta set-top boxes and on Concurrent and nCube VOD servers.
During that time the operator ran long-form ads for several advertisers, including a movie studio, an automaker, a consumer electronics retailer and an Internet service provider. During the fourth week of the trial Charter began greasing the wheels of the service by actively attempting to drive viewers to the iWant More category through cross-channel spots on linear networks including ESPN and USA.
Those spots on the linear channels were tagged at the end to direct viewers to the iWant More section to check out the various long-form videos, ranging from 90 seconds to 48 minutes. During the five weeks the spots ran, viewership of the iWant More category increased significantly, said Todd Stewart, corporate VP of national advertising sales and development for Charter Media, Charter’s ad sales division. He declined to provide specific usage increases, but said, “Using advertising is not like turning on and off a faucet, but in this case it was like that.”
Advertisers used the category to develop content that goes deeper than traditional ads and offers such things as more information on possible purchases and how-to tutorials. During the 10-week test, the movie studio showcased upcoming movies, while the consumer electronics advertiser produced a piece on how to build a home theater, which tied in to Charter’s strategy to drive its high-definition business, in particular with electronics retailers, Mr. Stewart said. The automotive advertiser created videos with more detailed information on two new vehicles launching in 2005, and a financial services company sponsored branded entertainment content.
Based on the success of the trial, Charter rolled out the category nationally to its VOD systems in August. Charter has deployed VOD to about 50 percent of its digital subscriber base. Charter’s overall strategy is to bake the concept with national advertisers and then begin peddling on-demand ads to local advertisers in its markets, Mr. Stewart said. In the second quarter of 2005 Charter will start to introduce the new ad option in five to six key markets that it’s selecting now.
Consumers can access the iWant More category through the VOD user interface or through the interactive program guide.
VOD advertising opportunities are still very much in the formative stages, but Charter and others have ample expectations. “As we have proven the platform we believe it will be a model that will evolve over the next two to five years,” Mr. Stewart said. “It’s an emerging business for all of us. We are out there trying it and have had some good success.”
Comcast, Cox and Time Warner are also growing their on-demand ad categories.
Time Warner Cable last week said it has renamed its ad sales units as Time Warner Cable Media Sales and also has rebranded them, partly by incorporating advanced advertising technologies such as VOD into the traditional ad mix. The operator is talking to advertisers about what type of content works best on-demand for them and plans to introduce a national VOD ad category sometime next year. Time Warner has tested VOD ads in some local markets already.
Comcast Spotlight last week wrapped up an innovative VOD campaign in which it partnered with Procter & Gamble’s Old Spice brand to create branded entertainment content for Comcast’s VOD platform, in conjunction with advertising on linear cable channels. Old Spice developed several 10- to 20-minute segments for VOD viewing from its Red Zone Contest, in which male contestants from 17 college campuses try to convince women at college football parties that they have the best scent. Old Spice said it is experimenting with longer ad forms to reach young men.
According to Comcast Spotlight, VOD opportunities for advertisers include advertising within time-shifted content, sponsoring original VOD content and extending the 30-second spot with long-form advertising. Thirty-second spots can serve as navigational aids to drive traffic to the new environment.
Cox introduced the Free Zone component of its VOD service in San Diego in 2002 and has included long-form ads from BMW Films, the San Diego Zoo, General Motors, Volvo, Kraft and Coca-Cola. In most cases, the ads were more like mini-feature films than traditional ads. Cox said it is bullish on the category and is likely to roll out Free Zone to other VOD markets.