The Broad World of Advanced Advertising Moves Forward

For cable operators, speaking about advanced advertising as a single issue is a vast over-simplification. In reality, advanced advertising is a continuum, from approaches that are here today - such as inserting ads in VOD streams - to more exotic use cases for which technology, standards and even basic definitions and taxonomies still are being finalized.The sense is, however, that these types of advanced advertising are deeply linked and that progress is being made on all fronts. Vendors say the complexity of the situation is coming fully into focus - a first step toward meeting the challenges - and that the paths forward on near- , medium- and long-term opportunities are clearer than even a few months ago.The attraction of advanced advertising is deep - and the competition for those dollars from companies such as Google is fierce. "We're getting to the end of the beginning," said Duncan Potter, the chief marketing officer for Seawell Networks. "We still have a little way to go until we solve the implementation and operational issues. That’s where the operators are."Perhaps the most important thing to recognize is that advanced advertising is far more complex than what the industry has offered in the past. At the same time, the vast majority of advertising revenue still is in the legacy area - and will stay there for the foreseeable future. "Almost all the money being made on ad insertion is from linear content," said Amit Eshet, the vice president of video solutions strategy for ARRIS. "We don't expect that to radically change in the near future."So the situation is that truly advanced ad revenue will be a trickle, percentage-wise, well into the future. Of course, the end game - and one that is considerably down the road - is dynamic insertion on tablets, smartphones and IP-connected TV sets. To do this, the key steps include the maturation of adaptive bitrate streaming (ABS) techniques and a series of specifications, such as SCTE-130 and SCTE-35.Eshet said development of these elements, as well as establishment of stable back offices capable of supporting the new approaches, are necessary for the end goal of multiscreen advertising to take off. It's a tall order.Eshet and Neerav Shah, ARRIS' vice president of product line management, suggest that the number of moving pieces make this transition tricky beyond the base technology. Though virtually everyone agrees that the world of multiscreen advertising clearly is promising, legacy - and highly profitable - advertising is not going anywhere. This could slow progress, since advanced advertising isn't something that must happen for the industry to survive.At the start, Shah said, the use of this technology may mimic the geographical-based advertising that is common today. Very quickly, however, it likely will evolve to Internet-style targeted advertising. Targeting individuals - or, more precisely, their tablets or smartphones - is quite a leap for an industry that until recently had been sending the same ad to whole DMAs. "Nothing is deployed, but you can see lab evaluations have been under way for about six months," Eshet said. "There is clearly a maturing cycle here."In the nearer term, said Chris Hock, the senior vice president for product management and marketing for BlackArrow, ad insertion into VOD streams is paying off. "The hot burning topic right now ... is the monetization of VOD."Hock said the technology is in place for his firm to insert "library" and real-time national, local and regional VOD advertising to 30 million households. That represents about 75% of the VOD advertising streams, though the streams can vary in size.The infrastructure that is in place to insert all those streams will help the industry transition to a unicast world of addressable advertising serving IP-based devices. Today, the task is to insert an advertisement into a VOD stream. In the future, the same basic technology will be upgraded and supplemented to do such things as deliver a basic ad to a laptop and related extended content to a tablet. Each of these pieces must build upon each other and not require the reinvention of the wheel at each step.The continuum of advanced advertising - which is ongoing - is a set of building blocks. "You have to make sure it all works together, that it is standards-based. MSOs must look at the overall roadmap. It is the VOD use case and the addressable use case and also the multiscreen use case," Hock said. "It requires the same core components and the same real-time services. It helps to architect the best solution from the start."Carl Weinschenk is the Senior Editor of Broadband Technology Report. Reach him at [email protected].