In the traditional point-to-multipoint model for television and video delivery, content is broadcast to all viewers in a continuous single programming stream. There is no ability to ‘switch’ content and select individual channels to send and transmit to particular users, says BigBand’s John Reister.
This limitation makes it inherently difficult to target commercials at specific groups or individuals. Early attempts at addressable advertising were inevitably hampered by the constraints of this linear approach to broadcasting.
For operators the only way to achieve addressability was through the set-top box. The rationale was that such devices are installed in many homes. Advertising content could be forwarded to the set-top box, stored there and made available to the viewer in real-time, effectively turning the box into a PC. While this approach still has a measure of support in the industry, it has proved complex and unwieldy in practice.
The limited storage space places constraints on available advertising content, making true addressability difficult to achieve. The consequent need to repeatedly upgrade the set-top box is likely to prove prohibitively expensive over time as well as being a significant drain on operational resources.
New World of Advertising
With the advent of Internet Protocol Television (IPTV) and switched digital video, the whole television advertising landscape has changed. It is now possible for operators to provide a switched video service and to direct streams at specific user groups without the need to use set-top boxes.
With sophisticated video processing capabilities now available at the network edge, ads can be tailored to specific audiences over high-speed IPTV -enabled networks. IPTV is naturally suited to deliver advertising with a high degree of personalisation. In addition, cable environments can support a targeted advertising approach although they have to migrate to switched environments to do so effectively.
It is now possible for operators to transmit large quantities of material to specific groups over the network and by so doing closely control and manage the content that is delivered to particular regions, demographics and even individual subscribers.
Fighting Back
The rich new functionality provided by switched networks comes at a timely moment for television advertising. Online advertising revenues have grown substantially in recent years as advertisers have increasingly chosen to pay premiums to reach their target audiences with more engaging, relevant messages.
In contrast, because of the limitations of its traditional delivery mechanisms, television has inevitably struggled to make its advertisements relevant to its entire user base. Its ad revenues – while still significantly greater than those generated in the online world – have remained relatively flat.
Unfortunately, targeted advertising via the set-top box does not fully address this issue. The constraints put on available storage by this approach means that true addressability is very difficult to achieve.
The targeting capabilities provided by switched networks could help television retain its overall share of total advertising revenues.
If broadcasters and content providers want to make television a competitive advertising medium in the future, they need to give it the same range of addressability and flexibility as the Internet has. The only effective way of doing this going forward is by integrating the necessary functionality directly into the switched network.
Addressable advertising services over IPTV and cable networks are feasible today and have been in active deployment in the US for several years. The approach offers benefits to operators, content providers and consumers alike. From the viewers’ perspective, it is much better to see commercials for products and services that are relevant and tailored to their individual areas of interest.
For the content providers, the extra revenue generated can fuel additional content creation. However, for all groups, the best and most effective means of providing a targeted advertising service is through the delivery of switched video.
John Reister is chief architect IPTV, BigBand Networks