Throughout the incredible journey of the telecom OSS/BSS sector over
the last 10 years, VanillaPlus has remained a reliable source of both key
news but also informative, objective and thought-provoking assessments of
the key trends which have shaped our industry. I am looking forward to
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role in providing valuable insights as we enter one of the most exciting
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Kieran Moynihan
Vice President & CTO Telecoms
IBM Tivoli Division
Addressable advertising may soon be adopted in cable and IPTV services
2008-04-15 13:05:34
Growing broadband penetration, changing consumption habits, service convergence and the rise of
multiple service operators (MSOs) are creating a diverse landscape
for entertainment consumption. Advertising continues to play a significant part in revenue generation, but there is considerable pressure to adapt to new business models using advanced technological solutions.
for entertainment consumption. Advertising continues to play a significant part in revenue generation, but there is considerable pressure to adapt to new business models using advanced technological solutions.
This is one of the conclusions of Datamonitor’s new report, “The Advanced TV Advertising Market, 2008”. It addresses
technological evolution, new business models, the competitive
landscape and developing implications for advanced advertising in the
near term. The report highlights the business case for investing in an
on-demand addressable
advertising solution, and assesses potential return on investment (ROI)
for digital cable and IPTV operators in developed pay-TV markets.
Chris Khouri, Media and Broadcasting Analyst and author of the report, says: “As
traditional forms of advertising begin to lose some of their
effectiveness due to multi-platform distribution and audience
fragmentation, there is increasing pressure
to create effective solutions to combat these challenges.
“One method is through addressing channel mediums (the use of the distribution network) as being just as important to target the correct audiences as the content itself. This involves boosting the effectiveness of advertising (producing higher ROI Positives) in order to charge higher cost per thousand (CPM) premiums to raise net advertising revenue (NAR). Home addressable advertising is a potential method to tackle this issue by targeting specific households with relevant advertising spots,”
he says.
Broadcasters are not expected to need to make large
CapEx investments for home addressability
to create effective solutions to combat these challenges.
“One method is through addressing channel mediums (the use of the distribution network) as being just as important to target the correct audiences as the content itself. This involves boosting the effectiveness of advertising (producing higher ROI Positives) in order to charge higher cost per thousand (CPM) premiums to raise net advertising revenue (NAR). Home addressable advertising is a potential method to tackle this issue by targeting specific households with relevant advertising spots,”
he says.
Broadcasters are not expected to need to make large
CapEx investments for home addressability
VOD, both free-to-view and pay-per-view (PPV), is a pivotal service in a cable and IPTV operators product portfolio. Furthermore, most major tier 1 and tier 2 operators are expected to be making, or have budgeted to make, the transition towards newer enhanced DPI solutions, such as switched video broadcast (SVB). Bearing in mind these developments, capital expenditure (CapEx) into specific hardware and software solutions has, in many cases, already been made. Addressable on-demand advertising uses much of the same software and hardware solutions (excluding campaign management, etc) of traditional VOD services.
Considering
this, the use of addressable commercials does not involve a high degree
of capital investment. In fact, the use of enhanced DPI solutions and
addressable advertising is outlined as having
the potential to lower operational expenditure (OpEx) and improve
bandwidth efficiencies through a greater return on bandwidth (ROB).
Flash-based on-demand servers could lower OpEx for broadcasters
A
further development that is set to be particularly attractive to the
on-demand ad insertion players is the emergence of Flash-based rich
media servers. Flash-based servers benefit from having no
moving parts and are outlined by vendors as being around 100 times more
reliable, having 10 times lower power consumption demands as well as
allowing for easier upgradeability and scalability.
As broadcasters strive to reduce OpEx in as many ways as possible, lower power consumption and greater reliability have a definite resonance in lowering total cost of ownership (TCO) of an on-demand server.
As broadcasters strive to reduce OpEx in as many ways as possible, lower power consumption and greater reliability have a definite resonance in lowering total cost of ownership (TCO) of an on-demand server.
Filed under: IPTV Marketing & Search Network Operators/VNOs Opinion