TORONTO – If everyone agrees the deployment of advanced advertising, finely targeted advertising, is a damn good idea that should yield a nice, new burst of revenue, why can’t the industry pull it off?
That was the question I had in my head prior to Tuesday morning’s CTAM Canada panel discussion on the topic held in Toronto at the Velma Rogers Graham Theatre. I’ve heard the players who spoke on this topic at other events and have chatted with most of them in person, too, on this topic.
Invidi Technologies, which led off the morning with a presentation on what its solutions do and how they are being deployed now, is one of the key technology companies that can drive advanced advertising into the market. We have featured the company and its CEO David Downey a few times already on Cartt.ca. Markham’s Capital Networks has been appointed by Invidi to assist with sales and market development in Canada.
Invidi’s Advatar technology can direct targeted ads not just to neighbourhoods, but to individual set top boxes, so the teenager watching Family Guy in the rec room might see an Xbox ad while mom upstairs sees the spot for a leather furniture sale. The broadcaster, on the other hand, has sold the same 30 seconds to two companies. More, if they’re really aggressive.
The industry has dubbed it dynamic ad insertion, or advanced advertising, and the terms have come to encompass slipping new ads into VOD and even PVR streams that the consumer watches on demand. The technology all rides on the cable platform.
The panel discussion is where I had hoped to see some movement as compared to a similar panel that CTAM Canada hosted in the very same room about two-and-a-half years ago with three of the same speakers. Alas, we seem to still be in a holding pattern, but maybe a few thousand feet closer to landing.
The session was moderated by Rogers Communications’ chief strategy officer Mike Lee and featured Downey, Rogers VP and GM television David Purdy, CanWest Global’s chief marketing officer Walter Levitt, the Association of Canadian Advertiser’s president Bob Reaume and The Fight Network’s strategy chief Mike Garrow.
Kicking it off was Levitt, who said: “We look forward to any technology that allows us to more efficiently use television.” He explained that advertisers already target their ads (buying specialty or buying conventional on a regional level), albeit not to the granular level Invidi’s technology can.
Purdy noted how Rogers is pushing ahead on the technology front using Seachange and Navic technology to insert ads into the video on demand stream (pending CRTC approval for more flexibility there when the new BDU policies are released this fall) and is about to deploy VOD data analyzer Rentrak to track VOD viewership.
The ACA’s Reaume called advanced advertising “a no-brainer” for his media buying clients. “We have to get there,” he said, looking around the room, adding: “If you guys build it, we will come.”
Looking at how well ads can be targeted on the Internet, Reaume noted that while the broadcast TV business is not going to go away if changes don’t happen soon, “it will dwindle,” he opined. Media buyers are becoming accustomed to well-targeted advertising and will soon be demanding it from their television buy, too.
Levitt added Canwest does want to embrace this new way of advertising, but stressed that there are numerous additional considerations. “The challenge is the way the industry works,” he said.
Broadcasters are now struggling with thin margins and have programming expenditure obligations, he noted. And if this new technology is riding on the cable platform and the MSOs are looking for a piece of the action along with Invidi, how is splitting revenue “three ways” a good idea for a broadcaster like Global TV, asked Levitt?
The idea, said Downey, is to increase the amount of revenue earned by the broadcasters by being able to double or triple the inventory of ad time available on popular shows (because broadcasters can sell the same 30 second spot to several advertisers, or show different brands from the same company to different demos), and then to also gather up and count the viewership of less popular shows across many other channels to sell in aggregate.
Rogers’ Purdy assured Levitt that the MSO is not looking for anything as large as half of the new revenue earned thanks to an advanced advertising platform. “The lion’s share will still go to the broadcaster,” he said. “We want to revenue-share on the premium” that broadcasters would earn on the ability to boost inventory and provide more precise targeting.
Reaume also chimed in to say his members would be willing to pay a bit of a premium “if we can get the numbers,” meaning there has to be a large market available, like Rogers’ 1.5 million digital cable customers. “The advertisers could see the value,” said Reaume.
Invidi’s technology is currently being deployed by major U.S. cable operators and right now, Canada has the luxury of being able to watch how it performs. In the U.S., MSOs have more incentive to launch the technology because it will support its multi-billion-dollar local ad avail industry. In Canada, those avails (the two minutes per hour of time U.S. cable channels make available for American cablecos to sell) can’t be sold and instead must be offered to Canadian broadcasters at cost or used to promote MSO wares.
While the industry waits on the CRTC to issue its new policies on BDUs – which will cover off advertising in the VOD stream and selling time on local avails, Purdy said there isn’t anything in the regulatory realm standing in the way of broadcasters and MSOs getting together to negotiate ways in which the type of targeting enabled by Invidi could be tested and deployed.
Downey and Purdy both saw Quebec as a perfect test bed, since Quebecor Media owns both the top-rated broadcaster in TVA and the largest cable company in the province in Videotron. TVA’s Le Banquer (it’s Deal or no Deal) gets a 37 share and surely has a lineup of advertisers who want in but face limited inventory.
Finally, privacy also remains a concern – and not that the technology isn’t secure (Advatar identifies the patterns in the data to define viewers’ characteristics but does not know what each customer is watching) – but that the potential customer perception that their cable company is watching what they watch. A scare like that “could shut this down,” said Reaume.
