Revolution in VOD Ads

Sep 12, 2005  •  Post A Comment

When Schick begins advertising its razors on Music Choice’s video-on-demand service this month, the campaign is likely to mark the start of a raft of new business for the music video service. That’s because word is just beginning to percolate through the VOD advertising community that the content provider is offering something that advertisers can’t get elsewhere: a guarantee.

Music Choice On Demand promises its advertisers that they pay only for spots that are seen, not those that get fast-forwarded. That bold offer isn’t and can’t be made by many other on-demand providers.

“If someone buys 1 million views, they will get that, no matter how long it takes,” said Christina Tancredi, senior VP with Music Choice.

Music Choice tags its videos and the ads as separate entities, allowing them to be tracked separately by Rentrak. Its deal with Rentrak gives Music Choice direct access to measurement information on its VOD activity any time of the day.

Trick-play data on whether or not ads were paused, rewound or fast-forwarded has been unavailable in the industry but is considered a critical objective for VOD measurement because it illuminates what is unknown today in the ad-supported VOD world-whether the ads were watched. Ads, of course, are the financial backbone for basic content providers in the on-demand world.

On the VOD Vanguard

Most networks see their usage data only on a monthly basis from Rentrak via the agreements Rentrak has with cable operators, rather than directly the way Music Choice does, said Ken Papagan, executive VP for Rentrak. However, Rentrak completed a test last month with 18 new providers, including broadcasters, cable networks and studios, and is negotiating deals with them for direct-access daily reports.

For now, Music Choice is in a unique spot and may remain so. Most providers encode their content and ads as one, making it tougher to track commercial viewing habits even with daily reports.

Being on the VOD vanguard has piqued advertisers’ interest in Music Choice.

“We pay for what we get and we know what we get,” said Mitch Oscar, executive VP of Carat Digital. He said he placed the VOD buy for Schick largely because of the guarantee. The razor maker is also advertising on-demand with Adult Swim and Anime Network because the demographics, like those of Music Choice, match the advertiser’s 18 to 34 target.

Starcom is currently evaluating Music Choice for several interested clients for the fourth quarter, said Tracey Scheppach, VP and video innovation director at Starcom USA. “They’re more attractive because they are giving me more of the data elements we are looking for,” she said.

Of course, a guarantee is only as good as the content it stands behind. Viewership of Music Choice has been growing throughout the year on Comcast, and in July Music Choice generated more on-demand views than any other provider, Comcast said. To be fair, consumers can watch six or seven music videos in the same time they watch a half-hour show. And on Comcast on a year-to-date basis for views and time watched, HBO still reigns supreme for VOD, Comcast said.

Nevertheless, from November 2004 through July, Music Choice corralled more than 100 million views for its videos, interviews, concerts and music specials for the cable operator. That’s out of 865 million total on-demand views for Comcast in that same period.

Separating Ads, Content

These numbers form the backbone of Music Choice’s current VOD advertising push.

“There is an active push to secure more advertising, to make Music Choice more of a presence in the advertising community,” Ms. Tancredi said, adding that the service offers an integrated buy across its broadband site too. “This is a relatively new endeavor for us, and we only just started to secure our first advertisers.”

To beef up its ad slate, Ms. Tancredi plans to fill several senior, junior and support staff positions.

Earlier this year Music Choice worked with its first advertisers-Best Buy through StarcomUSA and Coca-Cola through Starcom MediaVest Group. Music Choice is talking with both about renewals. General Motors came on board with Saturn spots, through Starcom MediaVest Group’s GM Planworks division.

Music Choice is also attractive to Starcom because ads need to be delivered only two weeks before they run, rather than four to eight weeks for other networks, said Ed Hauser, a media supervisor at Starcom.

In time, other networks will be able to measure trick-play data too. VOD equipment makers are working on ways to keep the ads and content separated as long as possible, making it easier to track whether an ad was watched or skipped, said Braxton Jarratt, VP of marketing for TandbergTV, which provides technology and systems for live and on-demand television.

Music Choice built its service to tag spots and ads separately because it plans to introduce a new tool in November, starting in an East Coast Comcast market, that lets users create customized and randomized VOD playlists. To design such a system, the advanced coding was needed from the start, Ms. Tancredi said.

Playlists are an innovative idea for VOD. “That’s definitely an architecture a lot of people have talked about,” Mr. Jarratt said.

Music Choice is available through Comcast, but more MSOs should come on board this month. Music Choice declined to specify who’s next, but the service is owned in partnership with Comcast, Adelphia, Cox and Time Warner.

Music Choice offers about 200 to 400 videos on-demand at any given time and plans to grow that figure to several thousand.