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New Connnections for an Old Standby

Sep 14, 2008  •  Post A Comment

The death of the commercial has been much exaggerated, according to experts in advanced advertising.
“The 30-second spot is in its ascendancy,” said Warren Schlichting, Comcast Spotlight’s senior VP of new business strategies. “It’s the perfect vehicle to allow people to interact, to get more content, to ask for information and to buy. That 30-second spot can be enhanced in many different ways—and that’s the key for TV to maintain its position and growth rate.”
That enthusiasm flies in the face of what appears to be a bleak landscape for the 30-second spot and its 15- and 60-second cousins. “We are all looking for ways to make advertising more effective—or as effective as it used to be,” said Bill Reynolds, director of media services at Erwin-Penland, a Hill Holliday agency, whose clients include Verizon Wireless, Wachovia and Michelin. “Thirty years ago, during prime time, 95% of viewers were divided among three networks. When you ran an ad, you had a high confidence level that a lot of people would see it. Now everyone has 100 channels in the living room and everyone has multiple TVs, so even in a household they won’t watch the same thing.”
Advanced advertising—a range of solutions that seek to more accurately connect viewers with relevant advertising—promises to break through the logjam of the modern viewing household.
Spot cable, by which an advertiser buys commercial time on all the cable networks within a certain market or geographic area, is the first step in targeting consumers with a more narrow focus.
“The most important weapon remains spot cable,” said Andrew Capone, senior VP, marketing and business development, at National Cable Communications, a spot cable advertising firm. “The vast majority of consumers for the foreseeable future will continue to consume TV in the relatively old-fashioned, linear way and see those messages. But more and more they’re becoming more comfortable with accessing content and commercial messaging in a nonlinear fashion, and that’s where our products, be it addressable or VOD, become more interesting to the marketer.”
Inter-Connects
Until now, to reach all the cable households within a single geographic market, the advertiser relied on the inter-connect, which links cable systems together to deliver a single ad. With an estimated 7,000 cable systems in the U.S., the inter-connect is a must-have for spot cable; no surprise that inter-connects still are growing rapidly. To make it even easier for the advertiser, cable rep firms like NCC specialize in placing ads across different markets and geographic areas.
But advertisers want to go granular, especially because Internet advertising, which can target consumers based on behavior, already offers a more pinpointed approach.
“We’re looking for something that’s more targeted and relevant,” Mr. Reynolds explained. “With addressability, we’d be addressing people only interested in the product. And the beauty of VOD is that the consumer has opted in. They have requested the programming, so they should be more engaged.”
The obstacles to ad-supported VOD and addressability are, however, significant. First, the numbers: Only 28 million households have VOD. “We have to get consumer adoption up, and I hold the cable companies responsible for that,” Mr. Reynolds said. “If VOD content isn’t being readily accessed by consumers, it won’t be a valuable advertising medium for us to sponsor. The idea is great, the execution looks cool, but the numbers are uninspiring.”
Addressable advertising raises the specter of privacy issues, which forces cablecasters to toe a strict line and convince viewers that they’re doing so—not an easy task.
Measuring VOD
Measurement—or the lack thereof—is another obstacle to VOD, said Jen Soch, VP/activation director, advanced TV, at Starcom Mediavest Group, who stressed the need to “get more reporting out of the cable companies to learn more about the VOD usage and network VOD specifically.”
John Hoctor, Navic Networks’ VP of business development and marketing, pointed out that with the myriad different software/hardware combinations among digital set-top boxes, the lack of standards also stands in the way of broad rollouts.
“There are emerging standards that will alleviate pain down the road,” Mr. Hoctor said. “We’ve had to port to all kinds of systems since we’ve been doing this since 2001, but standards will make our life simpler.”
Against the backdrop of Google selling TV ads in a deal with satellite TV company EchoStar as well as some of NBC Universal’s cable channels, six cable operators (Comcast, Time Warner Cable, Cablevision, Cox Communications, Charter Communications and Bright House Networks) in October announced their consortium, named Project Canoe, to create momentum with addressable advertising, interactive TV, VOD and measurement. “I think they’ve developed the insight that it’s in their own interest to come together,” said Tracy Scheppach, senior VP/director of video innovations at Starcom. “There are a lot of good ideas out there, but no standard. That makes the opportunity smaller than it could be and confusing for advertisers and their agencies.”
If the promise of advanced advertising plays out as its supporters believe it will, cable’s potential to bring in the ad dollars will soar.
“Cable has a chance to exceed the Internet from a data and reporting perspective because we have the chance to take a 360 view of media consumption,” said Comcast Spotlight’s Mr. Schlichting. “It’s a treasure trove for advertisers, with the caveat of being bound by privacy. As TV arrives at its digital capabilities—accountability, engagement and targeting—you’ll see the power of TV refreshed.”

One Comment

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