June 18, 2009 – Verizon is preparing to take its TV juggernaut to the next level with introduction of wide-scale addressable advertising on linear and on-demand programming and rollout of Web-to-TV services.
The foundations for both initiatives are in place, with the pace of addressable advertising now depending on business deals and the introduction of Web-to-TV imminent following a series of beta tests with various unnamed portals, according to Joseph Ambeault, director of product development and management for video services at Verizon. “We’re talking about changing TV for good,” Ambeault declares. “Our vision is everything on demand.”
Verizon’s FiOS TV is now available to 9.7 million households, 2.2 million of which are subscribing to the service, representing a penetration rate of 22.6 percent compared to 18.7 percent a year ago. The carrier is offering in the neighborhood of 15,000 titles, including movies, pay TV content and network programming, in VOD mode.
Along with a growing body of TV programming rotating in and out of the VOD queue to support time-shifted viewing, on-demand options will soon include Web content, Ambeault says.
“We’ve wrapped up our betas and are in our go-to-market mode,” he says, in reference to a trial begun last July that brought Internet video to the TV.
The carrier will be leveraging its Interactive Media Guide platform to allow customers “to navigate select sites using browse or search tools, viewing that lower resolution video on the screen,” Ambeault says, declining to name which sites are involved. The guide was designed on the carrier’s in-house developed IP middleware platform to provide advanced search and other capabilities across all content sources.
“The navigation was set up to support not only video feeds in all their different flavors but also music and pictures and information feeds,” Ambeault says. “And so adding in any of the content that is accessible to the TV is actually fairly trivial to get it into the search index. The benefit of the IP platform is for all intents and purposes we can distribute all content to our set-top, and search, being robust as it is, allows us to be able to add whatever we start distributing into that index for the customers.”
Ambeault says Web content portals’ response to TV deals has ranged from enthusiastic to reluctant in a negotiating atmosphere that’s reminiscent of traditional program deal making.
“You get the folks who are very bullish, just as in the earliest days of VOD, you had folks like Scripps who were extremely bullish on free on demand and then you had people like Disney who waited a little longer to come to the party,” he explains. “As much as the Internet world attempts to say they’re different from traditional media, the more it seems to me like they’re basically the same, except they use a different distribution mechanism.”
Where advanced advertisking is concerned, the basic technology platform is in place to support addressable placements across linear and on-demand content. Ambeault says. Now it’s a matter of drawing participation, which may not be as hard as it would seem for a player with about 2.2 million TV households to offer as an audience base to advertisers.
“Most of our focus has really been at the platform level as opposed to the service level on getting things enabled,” he says. “So the first element was just getting ad insertion up and going, which happened shortly after we launched.
“The next element of that,” he continues, “is around driving better addressability – going from a geographic to a psycho-demographic [approach] – and so bringing in those particular capabilities which the IP nature of our platform makes much more realistic than some of the other platforms.”
Rather than going with one type of advertising management system, Ambeault’s team has focused on developing an addressable platform that can support different systems to ensure the best system is used for specific requirements. “Our strategy has been rather than to double down on any particular approach to play the field and watch for which particular approach, if any, shakes out as the leading approach,” he says. “We’re about to plug in our second one. So I’ll know if everything we’ve done leading up to now is going to work out as promised before this year is out.”
Verizon has deployed the cable interactive middleware platform known as EBIF (Enhanced TV Binary Interchange Format) to enable advanced ad placements on its linear programming, which is delivered in a shared access mode analogous to the way cable linear programming is delivered, as opposed to the switched, dedicated channel approach used in IPTV. On the on-demand side, content is IP-based.
“From our architecture standpoint linear and VOD are served by the same system, at least from a fulfillment standpoint,” Ambeault says. “So we think about it more as the ads unit. It would be interstitials; it would be interactivity; it would be banners wherever they happen to show up. It’s less important which service they’re in and more what the actual unit is and what you can do with it. A 30-second spot is a 30-second spot, whether I put it in a linear channel or a VOD channel. The advertiser still wants it targeted and to make it interactive.”
Early experiments have been encouraging, Ambeault adds. “We started out with interactive Olympics last summer, and in the fall we launched targeted banners in the guide,” he says.
“In general we’ve done some pretty neat things,” he continues. “Last year we had a multi-screen campaign that was strongly based in long-form VOD for Burger King. It was their Freak Out campaign. It was awesome viral video of customers showing up to Burger King and being told the Whopper was discontinued, and then what they did. It got an amazing response. And then recently Unilever actually did an interactive long-form VOD campaign for their Axe brand – cologne, hygiene products targeted at young men – and that was also very well received.”
Ambeault notes that while Verizon is engaged with cable’s Canoe Venture to ensure the basic operational interfaces and metrics that Canoe is standardizing on are included in the carrier’s advertising models, Verizon is not timing its rollout of advanced advertising to the staged implementations underway at Canoe. “We’re not going to wait,” he says, [but] we’re going to attempt as we go forward to make sure we’re not running off into the weeds from the rest of the industry.”
While Verizon has far fewer TV subscribers than the largest MSOs, the fact that its entire customer base is enabled for advanced advertising gives it strength to drive new models, Ambeault says. “On certain occasions we actually are more relevant because my platform is nationwide and it’s not little pockets of capabilities,” he says. “When I turn it on I bring all of them. While a major MSO brings dozens of millions or maybe two dozens of millions of customers to the table, the difference is, for advanced capabilities, they’re talking small numbers.”
Moreover, Verizon’s ad sales operation cuts across all outlets and opportunities. “The thing you have to remember is, when we sell advertisers we don’t sell two million, we sell 80 million,” he notes. “I have a lot of touch points with a lot of consumers across all of my lines of business. We don’t just sell TV. We sell the entire Verizon experience. If you look at our broadband, our wireless and our TV customers combined, our ad sales organization works across all those screens. I don’t have an ad sales organization working on one screen and a separate one working on another screen like a lot of the MSOs do.”