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Virgin Territory

Jeff Baumgartner
10/13/2008

12:40 PM -- Although much of the talk about advanced advertising has centered on Canoe Ventures LLC, the U.S. cross-MSO initiative, Virgin Media Inc. (Nasdaq: VMED) is making a few ripples of its own across the pond. (See Canoe Ventures Paddles Ahead and Cable Aims to Revolutionize TV Advertising.)

The U.K.-based cable MSO has teamed up with SeaChange International Inc. (Nasdaq: SEAC) on a trial that dynamically inserts ads into video-on-demand (VOD) programming. As you might have already suspected, SeaChange International Inc. (Nasdaq: SEAC), which is supplying its AdPulse system, is also Virgin's VOD backoffice and server vendor. (See Virgin Trials Interactive Ads.)

Virgin is getting the three-month trial underway in north London with advertisers such as Kellogg's, Telefónica UK Ltd. , John Lewis, Royal Mail, and General Motors. The MSO plans to measure the trial using data culled by Rentrak Corp. (Nasdaq: RENT) and SeaChange subsidiary On Demand Group Ltd.

During the test, Virgin will match up ads to program genres, and try out different spot lengths, including single 30-second pre-rolls (i.e., ads inserted at the start of the on-demand program), consecutive pre-rolls, and ads inserted at the end of the VOD title.

The other important element is the dynamic, real-time capability of the ad insertion system being tested. Although U.S. operators such as Charter Communications Inc. and Sunflower Broadband have already conducted similar dynamic VOD ad tests, most VOD systems require ads to be baked in weeks ahead of time, making it difficult to alter or freshen up ad campaigns on a regular or rapid basis. (See Charter Tests Dynamic VOD Ads.)

The ability to change ads on the fly or target them to specific demographics is growing in importance as operators offer more and more ad-supported "free" VOD content and customers continue to use those services more frequently. Virgin, as one example, says about 50 percent of its 3.5 million TV subs watch VOD regularly, with usage growing to 45 million views in August, up from 34 million at the start of the year.

Oh, and this topic also gives me an opportunity to put in a shameless plug… we'll be discussing the topic of advanced advertising, including the role VOD is playing, in a free Webinar slated for Tuesday, Oct. 21, at noon Eastern Time, and sponsored by Arris Group Inc. (Nasdaq: ARRS) and Cisco Systems Inc. (Nasdaq: CSCO), and moderated by yours truly. Hope you can join us!

— Jeff Baumgartner, Site Editor, Cable Digital News

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