A linear path to advance personalized and interactive IPTV advertising

A linear path to advance personalized and interactive IPTV  advertising

IPTV presents service providers with a world of new business opportunities. Some of these, like the ability to offer cable TV-like services or bundle them with phone and Internet offerings, have been the most obvious early targets for IPTV service providers. Phase 1 of the IPTV era has been about building out networks to support those capabilities and get a foot in the door of new revenue opportunities. But, future phases will need to be focused on creating more value from new content and interactive features-value that can be delivered to customers and content partners, as well as benefitting IPTV service providers  in the form of more new revenue to feed the bottom line.

Some of that value will derive from advertising content. With new network technology and new TV services in place, IPTV service providers now have the foundation to more engage in the lucrative TV advertising market, an opportunity that to date has been left the domain of traditional cable TV operators.

Thus far, there has been a lot of hype about targeted, personalized advertising, the concept of using customer data to help advertisers distribute ad campaigns to very defined customer niches and potentially even customized and personalized in different ways from one household to the next.

To some extent, general concerns about consumer privacy have contributed a dose of reality to these grand visions. But, it has also become clear that IPTV service providers can't make an immediate leap directly to that future vision. They need a more practical place to start.

If IPTV service providers take a step-wise approach to the advertising market opportunity, they can accumulate valuable experience at this new game, as well as build stronger ties to advertisers and their own customers. This will allow them to support progressively more targeted and interactive forms of advertising--not only via the TV but multiple screens-that further provide enriched value to their constituents, including themselves.

The first step is entering the market for national, local and zone-based advertising, and a linear ad insertion solution can help IPTV service providers do just that.

Lisa Ciangiulli,   director of global advertising solutions marketing with Alcatel-Lucent, said the company has seen some IPTV operators that start right off asking specifically for a linear ad insertion solution, while others may need to start by studying their markets to determine how advertiser activity and interest they can generate, and the likelihood of customer interest in locally inserted ads.

"Some operators are already pretty savvy about advertising," Ciangiulli said. "They throw around terms like CPM [cost per thousand] and know what kind of revenue they are expecting to get from advertising, but others are just getting started and want to know how they can participate."

To some extent, the IPTV service providers already can follow the example of cable TV firms,  that often splice in ads on a regional and local basis. An effective linear ad insertion solution for IPTV service providers should allow them that flexibility on a regional and local basis, but also on a progressively more niche-oriented basis as customers and advertisers begin to show interest (or even on a larger-scale national basis if an IPTV service  provider operates in more than one country, as several European carriers do).

Ciangiulli added that advertising is not just an opportunity for the telco giants. Small, rural telcos within the same general geographic region may be able to present their network coverage to advertisers as an aggregate zone.

Other than the obvious benefits of gaining ad revenue and strengthening customer and partner value, IPTV service providers also can use inserted ads for their own promotional purposes. "We counsel our operator customers to do cross-promotion of other services and features through inserted ads, and also as a way of testing the quality and performance of inserted ads," Ciangiulli said.

Technically-speaking, a comprehensive linear ad insertion system needs to do several things to present a quality ad. It needs to support recognition of cue tones that identify commercial breaks, carry out scheduling, serving, splicing and encoding the ad for introduction into the live TV stream and manage the collection of data to measure audience response.

Alcatel-Lucent provides those capabilities as part of its Personalized and Interactive IPTV e Advertising Solution, which leverages the company's industry leading IP video routing platform for multimedia services delivery. Alcatel-Lucent supplies a card that can be installed into it routers to enable linear ad insertion covering all of the above-mentioned functions.

The aspect of measuring audience response to inserted ads is particularly important in making sure the advertising process works to the benefit of customers, advertisers and service providers, Ciangiulli said. Ultimately, engaging in the ad market means provide not only quality presentation of the ad, but also some proof that the advertiser is getting their desired return on investment and customer is seeing ads that are helpful to making purchasing decisions.

Alcatel-Lucent uses network probes that collect customer response, such as channel changing, at an aggregated level. This does not occur at an individual user level. "You have to be completely and totally focused on protecting the privacy of the customer," Ciangiulli said.

By providing some sense of customer response and activity, carriers can benchmark ad value and prove return on investment for advertisers. And, as customers see more localized ads that are potentially more meaningful to them, it can open the door for carriers to explain to them the benefits of a more targeted ad. " "Linear ad insertion with more accurate audience measurement helps you provide valuable detailed analysis on viewing behaviors to media partners to understand the success of a given campaign," Ciangiulli said.

Eventually, as linear ad insertion paves the way toward more targeted and interactive advertising, it also sets service providers on a course for multi-screen advertising. The stronger customer relationship that built through linear zoned ads can be leveraged to create a more comprehensive and adaptable ad environment. Customer preference information collected separately from each service platform-TV, mobile and Internet-can help IPTV service providers and advertisers assemble packages to what customers want to see, as well as how and when on different devices. That will enable carriers to measure the value of multi-screen ads, and for advertisers to see that value.

"The TV and mobile domains are separate for now because that's how Advertisers and media agencies  are buying  now," Ciangiulli said. "The goal is to eventually have integrated marketing campaigns that don't duplicate one another, in which an ad delivered on one screen might dictate how that ad is presented on another."

It may take some time to realize that goal, but one thing is clear: For IPTV service providers, it all starts with linear ad insertion.