Omnicom Media Group, Intel Partner on IP-Delivered TV Ads

Experiment Will Include OMG Clients FedEx, Hilton, Nissan

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NEW YORK ( -- Omnicom Media Group and Intel have inked a deal in which OMG will use money from its Next fund to experiment with advertising in IP-delivered content -- video delivered to TVs via the internet. The first Omnicom clients involved in the test are FedEx, Hilton and Nissan.
Viiv is Intel's brand name for its media-center technology that allows internet content to be delivered to the TV.
Viiv is Intel's brand name for its media-center technology that allows internet content to be delivered to the TV.

Ads from PCs to TVs
The goal, said executives from both companies, is to develop models or templates that make it easier to bring ads from PCs to TV screens. Intel's Viiv has marketed itself on being a chip that allows users to send internet content to the TV.

"Think about all of the content available on the internet being available in a living-room environment," said Daryl Simm, CEO of Omnicom Media Group. "Development of broad-scale distribution of this kind of content is a certainty and so appealing to consumers and advertisers."

He said a core part of the appeal of such a system would be "making TV as accountable as the internet" by using customized messages and with the potential to get feedback from the viewer. Today there is no industry standard for IP-delivered ads to a TV.

The deal shows a desire on behalf of media companies and advertisers to experiment with various video business models but it also might signal a wish to get in early on the technology and make sure there are more possibilities for ad models. By contrast, cable operators' video on demand systems were not created with advertising front of mind and a lack of standards and compatibility has slowed VOD advertising growth.

Omnicom Media Group's Next fund pools clients' money to allow it to experiment in digital/emerging-media space.

First partnership
Intel said it had been talking to several different agencies and holding companies about experimenting in the space, but Omnicom signed the first nonexclusive partnership. (The partnership is unrelated to Intel's advertising account, the company said. Its agency of record remains Interpublic Group of Cos.)

"We do plan to open it and bring in other agencies and other technology companies and others needed to make this broad-based," said Kevin Corbett, VP of Intel's Digital Home Group. "But we felt it was important to get started."

Mr. Corbett gave a hypothetical example of how the experiment would work:

"Let's make a big assumption that we decide the hottest thing in advertising would be to click a button and get an e-mail sent to you," he said. "Omnicom leads in creative and ad design experience. Intel would build the tech needed to implement that. Then Intel would work with our partners where we can take that new tech and implement that in various portals -- AOL or Yahoo or movie companies -- and work with them on Viiv, and we'd prove it out and test it."

NYC test facility
To test such scenarios, Intel has set up a facility at a Manhattan CompUSA store. The first content company involved in the experiments is AOL. The group also is using ZeTools, a content-publishing solution.

Mr. Corbett estimated they'll be testing it on a broader scale using market pilots by the middle of next year.

The partnership will not try to create the economic model surrounding such deals -- how high cost-per-thousand rates should run or how much a particular type of sponsorship should cost. Other questions include whether the deals would require longer- or shorter-length messaging or more exclusivity than a typical TV pod.

"All that is part of biz models that get developed over time ... [and] we don't see any obvious issues in terms of developing business issues," Mr. Simm said. "That will happen thanks to a competitive marketplace over time."

Area of ad opportunity
He said he is certain "10-foot" IP-delivered video -- as opposed to the two-foot viewing experience on a PC -- is going to explode as an area of ad opportunity, and figuring out how to monetize that through advertising will accelerate the process.

"User-generated content exploded because it's free," Mr. Simm said. "Now there's an avalanche of content that's premium, but it's often pay-per-view. We believe what's really going to explode premium content is when advertisers support it. The majority of consumers watch ad-supported channels. There's rich ground to be harvested for ad-supported media."
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