In national surveys we keep hearing that, although consumers are warming a little more to advertising for free content, they love DVR because of the opportunity to skip commercials and get straight to programming. It takes less time to watch a show and no one has to learn about Dr Soles foot cushions when there is a cliff hanger in the show they are watching. I know this to be true in my own household, but then again, I noticed a caveat recently to that when I was watching Bravo’s Top Chef and was randomly hitting the fast forward to get to the next part of the show….I saw a funny commercial. I actually stopped hitting the fast forward button and started hitting rewind to see the commercial, thereby delaying my need to watch the next part of the elimination challenge (Top Chef is a reality series) which is by far the most climatic part of the show. You know if I was someone taking a survey to see if I wanted more advertising or would I be willing to watch advertising for free programming, I might have said no. My time is valuable to me and saving a few dollars to watch commercials really turns me off and I am an advocate of content and advertising personalization and speak on it often. Although, after observing my behavior in that instance, I have to say I have been thinking a lot about how our industry showed view the multi billion dollar a year potential of dynamic advertising.

Looking over the industry, many of the MSO s are engaged in trials of one form or another introduce new concepts in advertising. The industry’s commitment in this is clear. Raising the CPM (Cost per Thousand) rates are important to modeling the ongoing viability of offering new content. Doing this is going to require precise targeting, delivery of cutting edge advertising that gets reaction, and a service model that does not get in the way of consumer satisfaction. Currently there are trials with ad updates when replayed VoD content is played again, giving new revenue opportunity to a replayed movie or purchased sports event that is recorded via DVR. Although that is a winning proposition for the operators, and even IPTV providers, it does not go far enough. It appears that specific location (aka city, zip, and neighborhood) and user demographic targeting is still about 12 – 24 months away from hitting what could be considered large scale integration. Even so, with critical mass so “at arm’s length” MSO’s need to be concerned with the technical and business models of what those offerings will look like. There has been some question in the industry that consumers may dislike the opportunity to get more advertising, even if it is in what could be deducted to what they are in the market for. The thought process is, consumers hate commercials, but want content and don’t want to pay too much for it. That is hard to build a model on. Based on my earlier observation on my own viewing habits, I think there is a way for all to win in this area.

I think some of the emphasis in the industry must be on building a business model that is manageable, targeted, and creates user satisfaction. With all the pressure on the MSos and service providers to ramp up advertising as a leading revenue generator in the services of the future, targeting has got to be part of that. Specifications like the CableLabs OCAP 1.1 (now Tru2way) that are gaining traction this year, MSO’s need to look at the management and modeling of targeting as well as the type of advertising that is going to be successful to their customers. To this end, we [TM Forum] are teaming up with the Cable Congress Show in April to put on a track doing just that. The concentration will be on calling together the MSOs, vendors, industry associations, and advertisers to work on data modeling and flow and management of user data downstream to enable the quick and efficient implementation of targeted advertising offers. The meeting will be held the last day of the Cable Congress Show on April 25th. I am excited at the prospect of having a true industry initiative in place early in this service. I hope to see all MSOs and those who serve that industry there. Be sure to stop up at the panel table and say hi!

Signing off for now!