Advertising insertion into VOD content is the next revenue stream for the cable sector. Julian Clover speaks to Tandberg’s Edward Allfrey.
Targeted advertising has been a conference theme for about the last 18-months and is now getting to the stage when you feel it just might be about to happen. The driver is on demand, which takes on significance on this side of the Atlantic where there has never been the relationship between advertisers, broadcasters and cable operators as has been the case in North America.
Sitting down with Edward Allfrey, Business Development Director, Cable, Tandberg Television, it became clear that operators are beginning to think about the next stage in the development of their services. Allfrey has seen the business from both sides, having spent ten years with Telewest, before moving to the technology provider.
The first step is to look at the content, which in Europe has been driven by the catch up TV services, BBC iPlayer, SVT Play and TVPi. Although one of the key problems has been in navigating the available content, and how best to make new discoveries, Allfrey does not believe that the older interfaces have been entirely unsuccessful. “It’s a user experience that people understand, and for the older and tech savvy they know how to find content in their EPG, so you can see that ability to find more content. That’s why we see on the on demand platform a much wider demographic than the 16-35 year olds which are the basis for streaming video in the internet.”
Allfrey has seen how VOD has been able to lock in customers, not only to their current tiers, but encouraging them to trade up to a level that unlocks a wider selection of content. Then there is the targeted advertising, one of the current flavours of the months, driven by the US market where there is a history of cablenets being able to sell their own advertising airtime within the cable–only channels.
“The great thing about advertising in on demand is that you can target it. Each stream goes to an individual household, so you can then say its easy to insert an advertisement based on their postcode, so that has intrinsically more value than the linear ad,” says Allfrey.
There is already a clear interest from the operators, highlighted by Virgin’s 100,000 home trial in North London last October, which according to the findings also recorded a greater awareness of individual ads.
Virgin already has the volume that makes it worthwhile to run targeted advertisements, other operators such as UPC are not too far behind of the curve, and the Amsterdam-based operator also has a history of local ad insertion.
Mark your diary for targeted advertising to be found on many a booth at IBC 2009.