Is On-Demand In Demand?

While on my recent maternity leave, my new baby kept my hands full nearly all of my waking hours. So I took the opportunity to tear myself away from the computer and interact with a medium that required just one hand. As I jockeyed with the remote control, I was surprised to find the television medium growing increasingly interactive, and offering marketers unprecedented opportunities.

What’s Available?

Though my ClickZ colleague David Cohen covered the topic in his recent “Wild West” column, let me recap the basic formats available on on-demand digital television: the long-form ad/content placement and the advertising-sponsored content placement.

In the first, a la Reebok, you use original content (perhaps behind-the-scenes footage from a TV shoot) and let users surf around at will. The content is the ad. BMW Films fits into this category, and, incidentally, that groundbreaking content that debuted on the Web also eventually found its way to a number of cable operators’ on-demand channels. These placements let advertisers associate themselves with engaging content, or feature the product in attractive situations.

The second format type looks very similar to a traditional television spot. Typically a :30 or :60, these appear before or within a piece of free video content. They could be exclusive sponsorships, or reside in “pods” with other ads.

These two basic formats can exist in combination — a sponsorship can link to a long-form ad, for example — and they’re use by marketers is usually accompanied by a traditional cable or satellite network buy. That traditional buy is important, by the way, because “if you build it, they will come” may not apply to video-on-demand. Viewers may not come see your content unless they know it’s there, so, in effect, you need an advertisement for your advertisement.

Who’s Selling?

The cable multi-system operators (MSOs) and satellite networks are selling these types of opportunities, as are some of the cable networks. I spoke about the subject a little while back with Jeff Meyer, senior vice president of interactive sales at Scripps Networks (home of HGTV, the DIY Network Fine Living, and the Food Network).

“There has been a lot of talk about [video-on-demand],” he said. “This year it’s moved into that fast follower phase where there are a lot of clients” interested in it.

Scripps delivers its ad-supported programming via several multi-system operators, generally within the “lifestyle” section of a free on-demand channel.

“We’re in about 14 million homes,” Jeff told me. “Each brand offers up to 10 hours of programming at any one time. A lot of what you see are prime-time programming time-shifted.”

Advertisers generally get 100 percent share of voice in a particular program, but viewers can fast-forward over ads just as they can with the rest of the programming.

One of the first MSOs to embrace advertising in on-demand areas was Cox Communications. It started offering FreeZone, an ad-supported on-demand offering, in San Diego in 2002. Now it’s available to more than 1.1 million Cox Digital Cable subscribers in nine different markets across the country.

Though Cox’s David Grabert wouldn’t say how many people were actually watching these features, he assured me FreeZone is increasingly popular.

“What we learned in our San Diego experience, and what continues to prove out in other markets, is that people will go out and find content and they will watch commercial messages if it is of interest to them,” he said.

David says most deals are priced on a custom basis, as the medium is still too new for the establishment of a rate card.

“That’s also a bit of a reflection of where we are in the life cycle of that product for the advertising community,” he said.

Challenges

More indications of the cutting-edge nature of the product are the lack of standardized creative formats or success metrics. Currently, you can’t make one creative execution and deploy it across MSOs and satellite providers. Needless to say, that’s a disadvantage, particularly for advertisers who are spending a lot of money on creating an engaging experience for viewers.

As for metrics, Cox provides a great deal of them: unique households that viewed the content, duration of content viewed, total views, share of enabled subscribers viewing, number of views per ZIP code, number of views per psychographic profile, propensity to view based on psychographic profile, number of views per day part, number of repeat views per household, and the share of active subscribers viewing the content.

With all of this data, Cox is a pioneer in providing marketers with metrics, but all of the operators — and advertisers — must agree on what’s important to measure before the medium even begins to mature. Such discussions are ongoing, according to David at Cox.

I must say that as a viewer, whether I’ve got my typing hands free or not, increased interactive programming has made television a much more attractive medium. Time will tell whether other viewers enjoy the experience and make video-on-demand a staple of the interactive advertiser’s budget. In the meantime, where’s that remote?