The video-on-demand (VoD) advertising market, which looked all but sunk a few years ago, is showing signs of resurfacing, with the new deal between Canoe Ventures and Walt Disney to insert dynamic ads in cable VoD programming from the ABC and ABC Family networks the latest sign of renewed industry interest.
Canoe Ventures LLC will also begin targeting ads dynamically in on-demand sports training videos from Sportskool.
Canoe has navigated through rough waters since the technology company was founded in 2008. Backed by multiple MSOs, the joint venture harbored an ambitious goal to create a national platform for targeted and interactive advertising. That plan was scaled back significantly in 2012, however, along with the company's employee headcount. In addition to laying off 80% of its staff, Canoe lost support from Cablevision Systems Corp. (NYSE: CVC) and Charter Communications Inc. during its effort to refocus the business solely on dynamic VoD ad insertion. Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Bright House Networks , and Cox Communications Inc. remain part of the Canoe consortium. (See Cable's Canoe Sinks Interactive Ad Business.)
Meanwhile, the latest win for Canoe, which was announced at the TV of Tomorrow Show, isn't the only mark of progress for VoD advertising. Comcast and The Nielsen Co. recently announced an arrangement for joint development of a new advertising product called On Demand Commercial Ratings (ODCR). Once fully implemented, ODCR is designed to give programmers advertising credit beyond the three-day, C3 ratings window after an initial broadcast. (See Comcast Seeks VoD Killer App.)
A Nielsen source explained to Light Reading that the ODCR technology is an expanded application of the "Recently Telecast VoD" concept first introduced in 2006. That effort was started to expand advertising credit for programmers to include any on-demand viewing of a show within seven days of broadcast. The new ODCR initiative extends the value of a program even further, but does so under specific viewing conditions. Participating programmers are able to insert the entire ad load from the most recently broadcast episode in a TV series into any earlier show available in the VoD catalog. Those programmers then get advertising credit for viewers that tuned in to watch both the latest show and any episodes from earlier in the series.
VoD is an important asset for cable companies, particularly as over-the-top competitors continue to woo new subscribers. While cable customers may not like the idea of new ads in their cable VoD libraries, they are likely to approve of new content choices made possible by ad-based monetization. If programmers such as ABC continue to get on board with new ad technologies, there's an increased likelihood that cable VoD will start living up to its long-promised revenue potential.
— Mari Silbey, special to Light Reading