VOD Ads Move Forward

Jan 31, 2005  •  Post A Comment

Despite the lack of meaningful measurement data for video-on-demand usage, many programmers say they will work closely with advertisers this year to evolve the next phase of VOD advertising.

Ads will move beyond billboards, bumpers and 30-second spots as programmers and their ad partners experiment with shorter breaks, sweepstakes, teases for long-form content, how-to information and even sponsored elements within the on-demand shows themselves.

Programmers, including NBC Universal, Discovery Networks, Scripps Networks, Mag Rack, A&E and Turner Broadcasting, said they will work in concert with their advertisers to create new ad units as they simultaneously seek to get their hands on more detailed VOD usage information.

This increased intimacy between networks and advertisers is critical since programmers can’t yet offer demographic information for on-demand shows or details on whether a commercial was fast-forwarded or rewound. What they can offer is their storytelling expertise and the opportunity to work with advertising partners to craft more customized spots.

New Experimentation

“We are looking at VOD as a great experimental playground for testing new forms of content and new forms of advertising,” said Channing Dawson, senior VP of emerging media at Scripps Networks.

The new experimentation occurs against a tenuous backdrop of wants, needs and timing. Media agencies like Starcom MediaVest, Mediaedge:cia and Carat Digital placed clients in on-demand content last year. But cable operators haven’t been as forthcoming with VOD data as agencies would like, and agencies are reluctant to spend more without the data. Meanwhile, programmers need to monetize their VOD investments and are aggressively peddling ad slates with agencies.

But these seemingly contradictory forces are only likely to cause friction rather than conflict this year, because cable operators, programmers and advertisers know that the data issues must be resolved for the medium to work.

In addition, video programming will be available in a multitude of places beyond cable, including the telcos that are now carving out video plans that include VOD from the get-go. The easiest way for advertisers to get out their message in this competitive environment is to ride along with those programmer efforts, said Tim Hanlon, senior VP and director of emerging contacts at Starcom MediaVest. “If [cable operators] are too stubborn to move on the data issue for VOD, then programmers and advertisers could gravitate toward those that will offer data and measurement,” he said.

Right now, a programmer can offer an advertiser data on the total views for a show, a network and the larger content umbrella, such as all of Turner on-demand, said Chris Pizzurro, VP of multimedia marketing at Turner Broadcasting. Age and sex demographics are targets for 2006, he said. The value proposition a network offers in the absence of precise viewership data is an exclusive sponsorship in a clutter-free environment, since most on-demand shows include only one advertiser.

A programmer can also offer some big-picture information. For instance, Cartoon Network and its Adult Swim block are Turner’s most-watched on-demand categories, each generating about 1.5 million views per month from an on-demand universe of 10 million homes. “It’s up to programmers to convince [advertisers] to take the risk,” Mr. Pizzurro said. Cartoon Network’s on-demand advertisers include Kellogg’s, Nintendo and Lego.

As agencies, programmers and cable operators hash out the issues, the ads themselves will mature. Today, sponsorship messages reside at the start of a show. New forms of sponsorships will include a message at the start of the show that will drive viewers to additional ad-supported content at the end of the program.

For instance, L’Oreal could sponsor a segment on how to apply makeup that would run at the end of a “Queer Eye for the Straight Guy” from Bravo on-demand, said J.B. Perrette, senior VP of new media at NBC Universal. Or a fashion advertiser could sponsor a short piece on how Grace’s fashions have evolved after an episode of NBC’s “Will & Grace” on-demand. NBC Universal hopes to roll out an on-demand service in the next few months.

Tailored Ads

Discovery Networks launched its on-demand service last fall with 12 advertisers and plans to lower that number this year to four to six. That way, Discovery can work more closely with them to create tailored ads for the clutter-free, opt-in environment that VOD offers, said Clint Stinchcomb, senior VP and general manager for Discovery HD Theater and VOD. Variations of ads this year are likely to include shorter breaks, teasing a long-form ad at the start of a show, and sweepstakes.

Mag Rack also plans to explore a variety of ad models. In a show like “Guitar Xpress,” Mag Rack’s guitar instructional video, certain graphic elements could be sponsored by Gibson or another guitar maker, said Dan Ronayne, senior VP and general manager for Mag Rack.

As ads morph and become more like programming, it’s critical that the line between editorial and advertising is maintained so a channel’s brand isn’t diluted, said Scripps’ Mr. Dawson. That distinction is important, especially because long-form ads work best when they are closely tied to the content, such as ads for Lowe’s or Home Depot during a DIY show, he said.

Last year Scripps worked with Kohler to shoot three-, four- and nine-minute long-form ads on kitchen and bath design for HGTV on-demand and hopes to do more of the same this year. “What [advertisers] are learning is how to produce these pieces … and make something that isn’t a 30-second ad,” Mr. Dawson said.

In time, more advanced VOD ads could include “add-on pause” or “add-on fast-forward,” where an ad message is overlaid on the screen while the user is fast-forwarding or pausing content. Other possibilities include requests for interaction, in which a viewer could click on the ad to receive a brochure. Distributors will have to enable such functionality, though, Mr. Stinchcomb said.

Instead of working directly with cable programmers, advertisers can turn to an independent production house to create on-demand content that could run across various networks, said Mitch Oscar, executive VP of Carat Digital.