Fighting PVRs with Online Ad Techniques

SeaChange International has introduced new television ad technology that employs techniques originally developed online. The company hopes to help cable operators overcome the threats posed by personal video recorders (PVRs) and other interactive TV technologies

A set of new ad capabilities, which SeaChange calls its Ad Placement System, lets cable operators serve ads based on information such as subscriber location and the time of day video-on-demand (VOD) content is actually watched. It is hoped the more relevant, targeted ads that result will lower the incidents of skipped ads.

“‘Fast-forwarding’ is a big benefit of on-demand television, but we think that ‘ad-skipping’ with on-demand or PVRs is likely to become a big concern,” said James Kelso, general manager of broadband systems and VP of marketing for SeaChange. “We are addressing this issue in on-demand television with the SeaChange Ad Placement System — allowing advertising to become customized on a household by household basis to maximize relevance and impact. We want to enable the best possible experience for both the viewer and the advertiser.”

The ideas underlying the new system have implications not only for cable operators, but also for new VOD services online, should they seek to court advertisers. DVD rental firm NetFlix is reportedly working on a VOD service, while media giants Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros. Studios already have Movielink.

But for television companies, developing and deploying these new technologies may become critical to their survival. For example, the common practice of dayparting has been threatened by the ease with which consumers can watch scheduled content at any time of day. New features in the Ad Placement System let cable operators overcome the problem by inserting ads on the fly. This means spots, promos, and bumpers can be sold (and guaranteed to play) at the time on-demand programming is accessed.

Additionally, using “zip code plus four” precision, cable operators can theoretically craft ads that cater to regions and even neighborhoods, SeaChange said. The company offered the example of serving ads for a compact car to “downtown demos,” while wealthier “uptown” neighborhoods see an ad for luxury car.

“It enables cable to do essentially what online advertisers are able to do,” said John Coulbourn, a spokesperson for SeaChange. “Generally you find the ads available on VOD content are evergreen. What we do is provide more flexibility for cable operators to switch [out their ad content].”

Coulbourn said he expects cable operators to be extremely sensitive to the privacy issues that will inevitably be raised as cable operators begin to mobilize subscriber data and even viewing habits in their ad delivery process.

Such an economic scaling of ads could put cable operators in the position of having to chart affluence across their market regions, as well as to convince advertisers to produce twice as many ad units for the same size media buy. Coulbourn said the heightened production requirements can be offset by creating multiple versions of the same ad, and changing just a single creative element.

Whether such personalization efforts will cause consumers to reduce their use of ad-skipping technology remains to be seen.

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