It’s alive! Dynamic ads are up, running…and not all that scary

The cable network that’s all about scary is trying to take some of the fear out of dynamic VOD advertising.

Fearnet and its national advertising rep, Los Angeles-based Sony Pictures Television, are first out of the gate in selling dynamic advertising positions in viewer-requested video streams that run over cable and telco-video systems.

So far, says Paul Brennan, Sony’s SVP of Advertising Sales, nobody has run away screaming from the pitch. Instead, Sony has sold campaigns on Fearnet VOD to a group of advertisers across consumer brand categories including automotive (Volvo and others), film (Relativity Media, Anchor Bay Entertainment and others) video games (EA and Capcom) and television brands including AMC and Starz Entertainment. “Because there’s a conscious decision of a viewer to be there, it’s a very strong place to advertise,” he says.

Dynamic VOD advertising has been a long time coming. Although a handful of national cable networks have placed TV commercials within VOD programs over the past few years, most of the spots have been “hard-wired” into the program assets that sit on cable company video servers. That means the spots are wedded to physical ad positions, appearing within a program wherever and whenever it happens to be requested by a viewer at home.

It’s a buzz-killing approach in the eyes of many for a couple of reasons. First, it has required that advertisers manage elaborate processes to get their commercials stitched into content several weeks before a program ever shows up on a VOD menu on the TV screen. In television time, that’s an eternity. Second, it overlooks some nifty advantages of dynamic VOD advertising, such as the ability to align commercial content not with physical content but with demographic or geographic viewer attributes. Third, it obviates the DAI promise of arming advertisers with detailed data about how many impressions their advertisements delivered.

2012 launch

Starting in September 2012, Fearnet took the wraps off a more sophisticated version of VOD advertising that starts to get at some of the reasons the medium excites people in the first place. Working with Comcast and using technology developed by the cable consortium Canoe Ventures, Sony began offering dynamic national advertising within free-to-watch movies planted on Comcast’s VOD service. That’s “dynamic,” meaning the commercial time Brennan sells is associated with individual viewing stream requests, rather than a particular program or movie.

Brennan, whose company also sells ad time for Sony properties including the PlayStation Network, said Fearnet offered a nice fit for introducing DAI on the national stage. For one thing, the network owned by a joint venture of Sony, Comcast and Lionsgate Entertainment has built up a solid following as a cable on-demand video service, owing to its 2006 origin as a VOD-and-online offering. (The linear TV version of Fearnet was launched in 2010.) The audience numbers reflect that, as Fearnet usually ranks as one of the top three U.S. VOD content services, generating anywhere from 6.5 million to 9 million stream requests monthly. Fearnet also has wide household coverage – at least by VOD standards – with a total reach into 29 million homes, 18 million of which are outfitted for DIA ad placement thanks to Comcast. Brennan expects that number to rise as Time Warner Cable and other cable companies look to extend Fearnet’s DAI capability over their VOD domains.

I talked with Brennan last week about his experience so far in staking out new terrain for dynamic VOD advertising. Here’s what he had to say about…

Inventory: Limited commercial presence is part of what makes Fearnet’s VOD ad pitch appealing. In a feature-length film, viewers won’t see more than 6 minutes of total advertising, divided among pre-roll (typically 1 minute), mid- roll (4 minutes) and post-roll (1 minute) ad positions. The lack of ad clutter “really makes advertisers stand out,” Brennan says.

Impressions: Here’s where some of the DAI magic comes in. Sony sells ads based on measured audience guarantees, not ratings estimates. So rather than place commercials into assigned programs and ad positions, Sony instead sets up DAI schedules so that advertisements are placed into whatever available position comes up next across the entire Fearnet content map. In other words, whenever a viewer fires up any movie from the Fearnet VOD menu, that viewer will see whatever commercial is next in line to achieve an impression. A different viewer requesting the same movie five minutes later could see a different commercial in the same pre-, post- or mid-roll pod the first viewer watched.

Content flexibility: Those pre-, mid- and post-roll positions aren’t just for traditional 30-second ads. Sony encourages advertisers to run longer-form spots if it suits a creative purpose. Two-minute movie trailers are an example.

Timing: The lead time for creative from advertisers is about five days – a big improvement from the 3 to 4 weeks that used to be demanded for VOD ad insertion. “That’s a huge achievement,” Brennan says.

Selling: Brennan said there’s an education effort required for clients and agencies that are new to the DAI category. But most are familiar at least in concept with how DAI works. Sony has worked with both national broadcast TV buying departments and digital/new media buying teams, depending on agency preferences.

What’s next: Sony hasn’t yet dabbled in one gee-whiz attribute of DAI, which is to plant different commercials into different streams based on demographic or geographic attributes of a viewing household. The idea so far is to prove out the delivery capabilities of dynamic insertion nationally. But Brennan says Sony is working with Canoe now to refine technology and processes enabling household targeting.