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TelcoTV: Verizon Targets Ads

6:00 PM -- ATLANTA -- TelcoTV 2007 -- Ad insertion is a big topic here, because it's one of the ways carriers can make big money off IPTV, so the theory goes.

Verizon Communications Inc. (NYSE: VZ) is among those interested. The carrier wants to try dynamic ad insertion on FiOS and is looking for partners and for some ad avails (time slots) to experiment with, said Tricia Lynch, director of FiOS TV programming, during an afternoon panel on VOD business models.

The hope is to run some tests in the first half of 2008, "largely focused on the operational aspects," she said. By the second half, Verizon could start rolling ad insertion as a real business.

Interesting to hear one of the big players talk that way. That should be good news to the hordes of equipment vendors preaching ad insertion stories lately.

As for targeting those ads, it can be done in myriad ways, down to targeting individuals based on their viewing habits. Verizon wants to start simpler than that -- as do most telcos, probably. Time-based targeting -- showing different ads in the evening versus the daytime -- could be a first step, Lynch guessed.

— Craig Matsumoto, West Coast Editor, Light Reading

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Pete Baldwin 12/5/2012 | 3:00:05 PM
re: TelcoTV: Verizon Targets Ads I'm glad Verizon wants to try this out. The business model may not work -- that might be true of targeted ads in IPTV in general, for all we know -- but it's a way to generate some additional revenue out of FiOS.

Would it beat out original content as a revenue/audience generator? Not sure.

rjmcmahon 12/5/2012 | 3:00:03 PM
re: TelcoTV: Verizon Targets Ads VZ can't insert ads without permission from the copyright holder of the content. Local TV affiliates produce local news and insert ads there. FiOS may need to find something like local news or HSN that the FiOS early adopters will watch if they want to sell ads.

Or look for sites with loose or nonenforceable copyright, like social networks. Unfortunately, MSFT has set the price for them that makes this option less attractive.
rjmcmahon 12/5/2012 | 3:00:03 PM
re: TelcoTV: Verizon Targets Ads It looks like they carry locals in Sudbury:

http://www22.verizon.com/conte...
Pete Baldwin 12/5/2012 | 3:00:03 PM
re: TelcoTV: Verizon Targets Ads I don't think Verizon is talking about overrunning the current avail system. For now, they're seeking some avails they can use. They aren't going to just blast away some affiliate's spots.

Come to think of it - Does FiOS even carry local affiliates? Being focused so much on the infrastructure side, I'm not sure I honestly know the answer to that.
paolo.franzoi 12/5/2012 | 2:59:44 PM
re: TelcoTV: Verizon Targets Ads
Local Television gets local slot ad insertion. It is done every day on Satellite, Cable and Broadcast TV.

FiOS gets to insert these ads just like anybody else.

seven
rjmcmahon 12/5/2012 | 2:59:44 PM
re: TelcoTV: Verizon Targets Ads FiOS TV already does Ad Insertion on the standard national broadcast channels. This article is referring to Ads on VOD which is a different scenario.

How does VOD change copyright and broadcasting rights? Also, most consumers paying for VOD content expect them to be ad free (or at least have the capability to skip the ad via their remote.) I don't see anything here that helps with recouping FiOS sunk costs.
wanlord 12/5/2012 | 2:59:44 PM
re: TelcoTV: Verizon Targets Ads FiOS TV already does Ad Insertion on the standard national broadcast channels. This article is referring to Ads on VOD which is a different scenario.
rjmcmahon 12/5/2012 | 2:59:43 PM
re: TelcoTV: Verizon Targets Ads Seven,

There are two paths. First, is to follow Google and insert ads into content with little to no copyright enforcement. Second, is to negotiate rights to high value content and charge consumers for it, relying less on ads in the first place. (Or produce orginal content which is wildcatting.) IPTV really isn't too relevant in the above. Neither was TIVO which had a much better ad spewing, customer matching, potential. I think VZ would do best to focus on the former and follow GOOG. Indexing and data centers aren't that tough and in the long run they end up in much stronger position, even if late.
rjmcmahon 12/5/2012 | 2:59:43 PM
re: TelcoTV: Verizon Targets Ads Uh, I think you missed the point of the article. The point of the article was that with IPTV one could theoretically collect more information about what the consumer was watching and thus provide better demographic feedback to advertisers. From this better feedback, ad tuning could occur that would lead to ad slots being more valuable.

For the majority of the content (or more specifically the ad based, revenue generating content), which is national, copyright holders will prevent this. Also, there is no proof that a targeted ad displayed on a TV generates more revenue than a generalized one targeting the audience demographic. Also, "better demographic data" is a leap of faith and what may actually happen is that advertisers figure out that their ads are less effective than they think (less net revenue).

The internet is a different model due to being built out for unicast in the first place. Pay per click works. Probably not so with a lame, telco, copycat version of broadcast TV with psuedo unicast capabilities.
paolo.franzoi 12/5/2012 | 2:59:43 PM
re: TelcoTV: Verizon Targets Ads
Uh, I think you missed the point of the article. The point of the article was that with IPTV one could theoretically collect more information about what the consumer was watching and thus provide better demographic feedback to advertisers. From this better feedback, ad tuning could occur that would lead to ad slots being more valuable.

So, you can believe this theory or not. But it has to do with the intelligence behind the ad insertion NOT the ability to insert ads at all.

seven
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