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Advertising technologies


Can targeting rescue
TV advertising?
Despite the hype, business models behind targeted
advertis...
Advertising technologies

“TV operators need to provide interactivity so that their
      networks can take control of the...
Advertising technologies


time. The aim is to ensure that the              a little talk back channel, or just keeping   ...
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Can targeting rescue TV advertising?

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Can targeting rescue TV advertising?

  1. 1. Advertising technologies Can targeting rescue TV advertising? Despite the hype, business models behind targeted advertising are far from clear, finds Philip Hunter argeted advertising presents but in an automated way that still approach to targeted advertising T both opportunity and threat, not just for IPTV, but the whole broadcasting and video industry. It is true enables messages to be delivered to a large audience. This contains a clear message for IPTV for IPTV, as opposed to operators deploying appropriate technology there is the sub plot of whether targeted operators, given that that their audiences to implement the advertising will enable IPTV to wrest are mostly small at the moment. In the US, functions within their own customers from traditional satellite and where the telco field is fragmented into platform. cable operators. But the greater question many regional and local operators, some is whether targeting can help the TV IPTV services have audiences as small industry as a whole stem an exodus as 100. This is obviously of no interest of advertising bucks to other media, to a major advertiser, no matter how good especially the internet and online video IPTV is at targeting with its superior facility sites. The appeal of the internet for for interactivity and measurement given the advertisers lies in its ability to target high capacity always-on return channel. The customers individually and provide more other point is that a fast growing number of accurate feedback about the success purchases, including cars, begin and end on of campaigns. the internet. TV operators, therefore, need “Today we see advertisers moving to provide similar interactivity so that their massively to the internet as they do not networks can take control of the whole feel they have a good return on investment purchase cycle, from initial advert to final (ROI) on TV ads,” says Thierry Fautier, payment. In the case of IPTV, telcos director for telco solutions at video delivery need to grow their audiences and systems vendor Harmonic. Some of the probably pool them in order to provide biggest names in TV advertising are shifting an attractive target for advertisers. to the internet. General Motors plans to The need for such aggregation divert half its annual $3 billion advertising has been appreciated by PacketVision, budget, the third largest in the US, to online which almost uniquely provides a marketing and one-to-one channels over the managed targeted advertising service next three years, a dramatic rise from $197 for telcos and IPTV service providers. million in 2006. Other automotive makers “Part of the service we provide involves plan to make similar if more modest shifts aggregating numbers across telcos, such to the internet, while consumer goods that advertisers can start targeting within conglomerate Procter & Gamble, the world's much bigger audience groups,” says Patrick biggest advertiser spending about $7 billion Christian, PacketVision founder and CTO. a year, has stated that its future strategy lies The company can do this by distributing with what it calls “targeted scale”. This adverts via its managed platform to multiple seemingly oxymoronic expression implies IPTV operators on a targeted basis. Indeed, that larger advertisers want to target, this is an argument for having a managed “Larger advertisers want to target, but in an automated way that still enables messages to be delivered to a large audience.” Cable & Satellite International may-june 2008 www.csimagazine.com page thirteen
  2. 2. Advertising technologies “TV operators need to provide interactivity so that their networks can take control of the whole purchase cycle, from initial advert to final payment.” Still clunky launching an interactive advert service favourite channels, propensity to interact, However, this does appear in April 2006. Now 15 million UK viewers etc,” says Reeder. to rely on sufficient have the option of pressing the red button The other critical element is the ability numbers of IPTV operators to interact with adverts. Major UK to measure how successful an advert subscribing to the advertisers such as BT, British Gas, has been, for there is little point in PacketVision services, and Sony, have created interactive ads targeting if this fails to persuade a higher so the success for this medium, but even so success proportion of viewers to buy the product of this strategy has been limited and it has failed to stop or service concerned. Here again IPTV has remains to be seen. the exodus to the internet. As the edge, according to Christian, who cites Furthermore, there PacketVision's Christian argues, red button PacketVision's own trial completed in is the question, which interactivity is still slow, clunky, delivers January 2008 in which adverts were is common to all rather static images, and above all fails targeted at students watching the Inuk broadcasters and to match the granular level of targeting Freewire service providing IPTV services TV service of the internet that Google in particular has to UK universities. The trial provided much providers, of how exploited within its search engine. more accurate information about who saw to incorporate “TV operators need to provide adverts than traditional TV services, which targeting within interactivity so that their networks can rely on survey-based statistical sampling. a successful take control of the whole purchase cycle, “Because the network monitors channel business model, from initial advert to final payment.” changes, zaps and clicks on a second by according to Alan It is clear then that the bandwidth second basis, it is possible to get a count Lipman, chief and latency of the return path must of the exact number of clients online when video architect at be adequate, which is where IPTV currently the advert went out,” says Christian. There Redback, a sub- has an edge. More significantly though, was then the potential to segment the sidiary of telecoms IPTV operators are better placed to audience, and target more accurately by giant Ericsson, which integrate their services with the internet combining this information with Inuk's own specialises in IP routers and exploit the information that can be database of subscribers. “It is possible optimised for video gained about their viewers' preferences by to use information about what TV shows delivery. “I think the analysing their online habits. This avoids are being watched and for how long to biggest hindrance is the need to rely just on feedback from the predict with 97% accuracy whether the figuring out the business set-top-box (STB) to glean viewers' viewer was male or female,” says Christian. model behind targeting, and preferences, while immediately tapping into This is still a long way from measuring fitting this into the old model of buying the same resource as online advertisers. response to an ad, which ultimately can ads in TV,” says Lipman. “The real power in profiling comes only be done when a sale is closed. But To start with, operators must exploit when a viewer's online activity and their short of that, much more can be interactivity in order to match the television viewing activity can be linked,” accomplished with IPTV to ascertain the internet, raising the question of the says Stephen Reeder, managing director extent to which a viewer is engaging with extent to which viewers will engage with for Europe at ICTV, whose main product is an ad, according to ICTV's Reeder. “I think adverts while in lean back mode. the interactive video creation platform the true measurement will come through But TV operators have to be optimistic ActiveVideo. “Once this linkage occurs, the viewer's interactive engagement with and assume that viewers will engage, via opt in of course, Web style ad the advertiser's brand. Once interactive, providing they have the right platform profiling technology can be used to great everything can be measured from viewer capable of faster response and effect.” As Reeder notes, existing red selections to scene-by-scene linger time, a more “televisual” experience than button type interactive TV advertising has which could be used as a proxy for viewer current red button interactive adverts suffered from a dearth of reliable data interest,” says Reeder. The other great shown on many major TV networks. about viewers. “Even when advantage of interactivity is that it enables Sky transmitted the first interactive personalisation is introduced, the the advertiser to enhance its customer ads in March 2000, and the UK has granularity of profiling data will be quite profiles and the brand owner's “microsite” continued to lead in this field, with ITV poor compared to the Web in terms of where the session is controlled, in near real page fourteen www.csimagazine.com Cable & Satellite International may-june 2008
  3. 3. Advertising technologies time. The aim is to ensure that the a little talk back channel, or just keeping delivery. In the longer term, therefore, microsite keeps viewers engaged but the episodes locally in the STB. Satellite cable operators will migrate to IP over without detaining them unnecessarily, or operators can also hold the ads in the DOCSIS, but this will take time and annoying them with irrelevant messages. STB and insert them as appropriate using investment since new infrastructure and some form of digital program insertion STBs will have to be deployed. In the Matching IPTV's interactivity (DPI),” says Lipman. meantime, cable operators must avoid Such interactivity also dovetails well with But in the longer term all operators will technical fragmentation through adopting the ability of IPTV to open up the long tail need true interactive capability served by too many different STBs or approaches of content, according to Elena Branet, a high bandwidth low latency return to interactivity, according to ICTV's Reeder. senior marketing manager for the channel. In the case of satellite, this can “One issue that the cable companies will Connected TV Business at Microsoft. only be achieved by integrating with some face is the variety and capability of the “At a base level, the ability to deliver wire based network, usually DSL, via hybrid set top boxes in their installed base. virtually unlimited content with IPTV STBs. AT&T has done this in the US with In exactly the same way as multiple allows for a broader spectrum of content its HomeZone service, combining direct networks cause technical fragmentation, and advertising opportunities in general,” broadcast satellite (DBS) with high speed so do multiple devices within a single she says. “With such a wide array of internet access to support interactivity and network,” says Reeder. content becoming available to consumers, on-demand content. AT&T has yet to focus Architectures are being devised to allow technology can deliver benefits by offering much on targeted advertising, but the a common set of communication protocols smart new ways of search, discovery, and potential is there. between ad decision systems, campaign recommendations of TV and film shows In the case of cable, the main game managers and execution systems such as across connected TV devices.” at the moment is switched digital video DVS-629/SCTE 130. The standards are This all appears to throw down the (SDV), achieving a degree of interactivity currently not completed but this does not gauntlet to cable and satellite operators. But and multicasting without going all the way prevent an early adopter implementation, many of them have the big advantage of to the home with IP. SDV enables channels according to Basil Badawiyeh, VP of on- greater “eyeball contact”, with much bigger to be switched in and out of coaxial demand strategy at Arris, which has audiences at present. They probably actually segments at the edge of the HFC network performed some of the largest on-demand have greater experience of targeting on demand on a multicast basis. That advertising trials in the world. “The DVS adverts, albeit with limited interactivity. means a channel is delivered into a 629/SCTE 130 standards aim to provide a Against this, these operators have had the segment when and only when at least set of communication criteria between the common handicap to date of reliance on one subscriber in that segment is receiving various targeted advertising components the STB to provide the interactivity, with it. Clearly then SDV is not an effective including definitions of the ADS-ADM, functionality and richness of content mechanism for delivering true one-to-one playdata and content information service constrained by limitations in processing advertising, since a segment relies on the interfaces. IPTV operators could very well power and memory. “With IPTV, the statistical assumption that a number of the make use of such standards for similar interactivity is more in the network, enabling subscribers within a segment will be implementations,” he says. operators to build a better platform watching the same channel (or none at all) Then for all operators, there is the delivering more interesting interactive ads,” at a given time, rather than all watching issue of privacy lurking behind their says PacketVision's Christian. different channels. targeted advertising strategies. This applies Yet Sky defied the pundits by being In practice though, one-to-one targeting to internet advertising as well, but people a pioneer in targeted advertising purely is not yet a reality on any network, so SDV seem resigned to having their browsing via its STB, and there is the potential for should work fine in the immediate future, and certainly searching activities monitored, cable and satellite operators to continue enabling operators and advertisers to although they might take a dim view making some of the running just through zoom in on groups of subscribers of a Big Brother inside their TV sets. basic targeting without matching IPTV's identified on the basis of common As with the internet, viewers will have interactivity, according to Redback's interests, or other factors such as socio to opt in to monitoring, but may be less Lipman. For example, the ability to target economic group and previous buying likely to do so unless enticed by discounts enables advertisers to create and deliver habits. Advert selection can also be or perks such as free holidays. Indeed, stories in short snappy episodes that keep modified by non-personal factors such it is likely that successful exploitation the viewers engaged. “Serialising makes as time of day and weather. of targeted advertising will depend more sense because communication is all about But SDV is likely to be only a stopgap on innovative business models that telling a story,” says Lipman. “Cable approach, partly because of failing to scale embrace the viewer, rather than technical operators can do serialisation by having properly down to one-to-one unicast advert distinctions between platforms. CSI Cable & Satellite International may-june 2008 www.csimagazine.com page fifteen

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