Charter Tests Easier VOD Advertising Format

Cable Operator Hopes Dynamic Ad-Insertion Format Changes Archaic Process

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NEW YORK (AdAge.com) -- For a "new" medium, video on demand has a fairly archaic operating process. A new pilot program from Charter Communications hopes to begin to change that.
Charter Communications is testing dynamic, or real-time, serving of ads into on-demand video content.
Charter Communications is testing dynamic, or real-time, serving of ads into on-demand video content.

Advertisers will be able to switch ads in and out of VOD content in the pilot, which is testing dynamic ad serving on two on-demand channels that Charter carries on its cable system, Vehix.com (a car site) and Hollywood.com's Hollywood.com Television.

WPP Group's Ogilvy North Amercia and Mediaedge:cia each have a client participating in the test.

Cumbersome process
For marketers, it will be one step toward alleviating what has been a cumbersome process. Consider the challenges to advertising in VOD: For starters, ad standards can vary by cable operator, set-top box manufacturer and VOD technology provider. (And there are lots of each.) What's more, ads have to be baked into VOD content 60 to 70 ahead of time -- and once they're in they can't be dynamically swapped in or out. For an electronic medium, that's less flexibility than a monthly magazine.

"Advertising has had to be hard-coded into VOD content, and when it requires a 12-week lead time, it can be very challenging," said Maria Mandel, partner-exec director of digital innovation, OgilvyInteractive.

To understand the complexity of the problem, consider all the players that had to be aligned for the pilot: In addition to Charter, the two networks and the agencies, VOD technology enabler C-Cor had to be on board as well as Atlas, which serves ads in the VOD space as it does with online video.

Tested in lab
Todd Stewart, corporate VP-national ad sales and development for Charter Media, said Charter has tested the technology in a lab but this is the first field trial. Hopefully, he said, consumers won't notice a difference; already there have been baked-in pre-roll and post-roll ads on both Vehix.com and Hollywood.com. Now the only difference is the ads will be able to be refreshed.

Plus, there are some added benefits. "We can test copy length and type by program," he said. "We can watch tune-out levels. If someone doesn't tolerate a 60 [second ad], we'll see the second-by-second behavior. We'll truly be able to report on ad views separate from program views." Previously, one couldn't tell where an ad ended and program began, making it more difficult to monitor such things as consumers tuning out a spot.

Addressable ads
The VOD ads will also be addressable, Mr. Stewart said. That, combined with dynamic insertion, should drive valuable cost-per-thousand-viewer ad rates for the ad-supported VOD networks on Charter's system. Once Charter completes the field pilot and proves it's functional, he hopes to phase in more VOD programming that can support the dynamic ad insertion.

Ms. Mandel is excited about the measurable nature of VOD.

"I can tell whether a viewer saw the ad or if they fast-forwarded through it and I can optimize now, hitting a viewer with a similar message or a follow up message or give them a different offer," she said, adding that she sees tremendous potential in VOD from a consumer point of view. "We're moving toward a much more consumer centric, consumer-controlled model... but we have to crawl before we run and in the short term it's about evolving the model we have today."
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