Cox test finds that viewers tune in to VOD ads

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Findings from the first ad-supported video-on-demand test by a major cable TV operator suggest that viewers will gravitate to long-form advertising if they feel they have a variety of unique and entertaining options from which to choose.

Cox Media, a unit of Cox Communications, Atlanta, and the first cable provider to test ad-supported VOD, said hundreds of thousands of unique digital households accessed FreeZone, its ad-supported VOD service in San Diego, Calif. The test, which ran from July 17, 2002 through Dec. 31, 2002, included more than 20 advertisers, such as Best Buy Co., BMW of North America, Coca-Cola Co., Altria's Kraft Foods and Volvo Cars of North America. FreeZone advertisers used the format for a variety of purposes. Volvo used FreeZone to launch its XC90 sports utility vehicle; Coke's Diet Coke created an episodic reality series based on a young production assistant's frenzied life on a film set, and Kraft launched a cooking school that featured videos with recipes rotated on a weekly basis.

Among the key findings: Each visitor accessed advertiser videos an average of 3.76 times per week, and the average unique visitors accessing FreeZone each week totaled 5% of eligible households. Nearly 50% of the San Diego digital cable audience accessed FreeZone during the test period. Cox said more than two million videos have been accessed since launch, and the average direct response rate for FreeZone advertisers was 4.4%, nearly double that of traditional direct mail. Each unique viewer spent about 25.5 minutes per week viewing advertiser content.

"Depth and duration are the new significant metrics emerging," said David Porter, director-new media advertising, Cox Media. "When people can choose the content that is relevant to them, they respond and spend time with the brand and message."

Coke, which recently introduced a branded-entertainment music program with TiVo, considers the FreeZone test a part of evolution into non-traditional advertising. "It's one of many laboratories that we have to experiment and to originate new ways to communicate," said David Raines, VP-integrated communications. Mr. Raines said one of the things he learned from the trial was that ads associated with on-demand programming need better promotion on electronic programming guides.

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