The Ad Race
Service providers, so the idea goes, could use their IPTV networks to tally who's watching what. With a little back-office help from companies like HP Inc. (NYSE: HPQ) and Oracle Corp. (Nasdaq: ORCL), the service provider could also get in the business of inserting ads based on the data.
Targeting would be simple at first, based on factors such as which neighborhood one lives in. Later, service providers could target detailed demographics: age, gender, or income level, discerned by the types of programming being watched.
That latter stage carries big rewards, or so says Juniper and everyone else building IPTV machinery. It's going to be expensive getting the back-end systems in place for it, so some carriers will proceed slowly. Others "will go right to that, because the payoff is huge," says Gary Southwell, who leads the Juniper group in charge of multiplay (Juniper's word for triple play services and beyond).
The argument is based on targeted ads creating a larger revenue pool for the service provider and, ultimately, the advertiser. Possibly true. But what if modern viewing habits start to discourage advertisers?
In any medium, advertisers live with the fact that most viewers/listeners don't pay full attention to the ad. That's OK, as long as even a half-second impression lingers in the mind. But video, thanks to TiVo and its ilk, is rapidly approaching a point where even that half-second won't reach the consumer. Does that lower the value of ads?
By the way, check out Juniper's partner list for these advertising services. You've got names like Packet Vision Ltd. and SeaChange International Inc. (Nasdaq: SEAC)... and, look! Why, there's NebuAd Inc. It should sound familiar.
— Craig Matsumoto, West Coast Editor, Light Reading