With Time Warner Cable taking a lead role the pieces are rapidly coming together technologically and strategically to make dynamic advertising on linear channels a reality in the cable industry’s efforts to monetize TV Everywhere.
Since last summer TWC Media’s Ad Everywhere initiative has been serving as the industry’s proof of concept, demonstrating it’s possible to support dynamic insertions on a full lineup of live channels unicast on IP streams across an entire Tier 1 footprint. Over that time a number of other factors have contributed to raising the prospects as well, including:
- Higher viewership on TV Everywhere services;
- More live programming entering unicast streams;
- More licensing of programming for distribution over Wi-Fi beyond the home;
- A surge in advanced advertising trials;
- Growing consensus on metrics and valuation;
- Greater recognition among advertisers that there’s a significant upside to making sure their TV ads reach viewers on connected devices.
Perhaps most significantly, Comcast, by virtue of its proposed acquisition of TWC, an aggressive expansion in its multiscreen TV operations and its just-completed acquisition of video campaign management firm FreeWheel, is positioning itself to lay a broad and deep foundation for bringing advanced advertising into the mainstream. While the company has been tight-lipped about efforts to support dynamic advertising on live streams, that piece of TVE monetization is the next big priority now that a platform for ad insertions in IP-streamed VOD and “download to go” content is in place, according to Matt Strauss, senior vice president and general manager of video services at Comcast.
“On-demand, download and live – that’s the progression we’ve been steering for, and we’re starting to see others move in that direction as well,” Strauss said during a panel at the TV of Tomorrow conference in New York on December 11.
“I think you’re starting to see those pieces come together,” he said. “You’re starting to see some of those hurdles where you have critical mass of programming that’s now available; you have a critical mass of devices that are accessing it…. So if we don’t get it right, shame on us. I think we certainly have it within our technical, functional technical capability to do.”
Indeed, thanks to TWC’s efforts, it’s clear the industry can meet the technology challenges of enabling dynamic insertion on live IP channel streams. After about a half year of selling local avails on live unicast streams, the MSO has proven it’s possible to put together a scalable, extremely reliable multi-vendor platform with the capability to support dynamic insertion across a multichannel TVE lineup that now includes 54 channels.
For operators choosing to construct a best-of-breed support system for such an effort, the TWC experience bodes well as an alternative to relying on a pre-baked end-to-end solution. Leveraging standards such as CableLabs’ Event Signaling and Messaging system and the SCTE 35 and 130 signaling protocols, the MSO was able to build exactly what it needed to handle the scale and complexity of the operation, officials said.
Vendors chosen for the operation include Aspera, BlackArrow, Envivio, SeaWell Networks, Strata Marketing and FreeWheel. A particularly daunting challenge was finding a way to make sure every ad and every piece of content ends up in the right place in the complex adaptive streaming environment.
“The kinds of things that would give you nightmares if you thought about this in advance would be, could they scale, could they do it with no latency, could they do it with regularity or reliability with no error sets?” said Chris Faw, senior vice president of operations at TWC Media. “All of those hurdles seem to have been overcome.”
The solution TWC settled on is the Manifest Delivery Controller supplied by SeaWell Networks. SeaWell’s MDC is “the gatekeeper deciding who’s going to get what, when and where,” Faw said. “That’s their role, and they’ve done it fairly seamlessly.”
The MDC identifies and reacts to “markers” in the streamed content manifests, the miniature metadata files conveyed to each client device with each fragment of the stream. “We sit in the manifest out of the encoder, see where an ad is to be inserted and make the call to FreeWheel to say, what do we put in the manifest,” explained SeaWell CMO Duncan Potter.
FreeWheel, as the repository of the ad decision-making parameters, conveys the information back to the MDC. “What then happens is we manipulate the manifest delivered out to the device so that the device knows to retrieve the designated ad fragments from the CDN,” Potter said. Of course, all this must be done in real time with absolute precision ensuring that the designated fragments comprising the ad stream start and end exactly in sync with the programming flow.
Ads aren’t the only part of the dynamic manipulation process. Blackout policies must be acted on as well, which requires directing the right content flow to every household.
Such targeting requires access to a wide range of data pertaining to each user’s location and other parameters, which can be supported on a per-session basis utilizing data flowing from the manifest manipulation process versus having to compile and parse user information from CDN logs. This not only helps with the ad-decision process; it provides an ongoing record of ad performance.
“We’re doing asset manipulation in real time and collecting quite a lot of session data,” Potter said. “We bring them very near or even real-time insights into what’s happening on the network in the home. They can see things changing, bitrates changing. If the ad decision server isn’t responding, we register that.”
So far, all the dynamic insertion capabilities have been enabled for Apple iOS and Android devices running Android OS 4.0 (Ice Cream Sandwich) or later iterations, which use the Apple adaptive bitrate streaming technology HLS (HTTP Live Streaming). These devices make use of the discontinuity tags embedded in HLS streams, which alert clients to changes in video segments. The TWC platform also supports dynamic insertion on streams to Xboxes and Samsung smart TVs and soon will support streaming to Roku boxes as well.
But the TWC Media Ads Everywhere initiative has yet to introduce ad targeting, either at the geographic zone level such as is commonplace with local advertising on legacy MPEG-2 channels or at the household level. The system is designed to support such targeting, but it’s too early in the rollout of live TVE to try to sell ads on a targeted basis, officials said.
There’s no doubt that TVE has taken a while to catch on in the marketplace, as evidenced in various research reports issued over the last year. For example, in November, consulting firm Altman Vilandrie & Co. reported that a third of the people who can get TVE service, when asked if it’s available to them, say it is not. Among five age groups surveyed, the 18-24 segment is the only one where 50 percent of those who have access to TVE actually know it’s available. Similarly, in June Park Associates reported just 26 percent of U.S. subscribers with access to TVE service know that it’s available, and just 16 percent of subscribers with access to TVE from a pay TV service provider have actually used the service.
But things are looking up for advertising on authenticated subscriber streams, judging from FreeWheel’s Q4 2013 Video Monetization Report. Not only did viewing of ads on long-form content in general increase by 86 percent year over year, accounting for nearly half of all ad views associated with streamed video. Ad viewing on long-form programming, defined as lasting 20 minutes or longer, accounted for nearly half of all ad views on content distributed online by TV programmers and MVPDs, the report said. Ad viewing on live digital content was up by 148 percent year over year, and, most heartening of all for operators, the cable, satellite and IPTV segment saw a 268 percent growth in ad views on authenticated content.
“App traffic helped drive impressive growth in non-desktop environments with ad views on mobile phones, tablets and [over-the-top (OTT)] devices all growing at over 100 percent each,” the report said. “As digital viewing continues to grow upwards of 30 percent per year, expect to see innovation keep pace as the industry endeavors to bring TV to consumers wherever and whenever they are watching.”
Reaching the threshold for targeted ad sales in TWC’s case will be abetted by the fact that the MSO can aggregate eyeballs beyond its own subscriber base. TWC Media, a pioneer in building regional ad networks for the pay TV business, represents many other MVPDs, depending on the locality, including, for example, Charter, Comcast and even DirecTV and DISH.
TWC Media and other executives in cable ad sales are convinced the demand for addressable advertising is there from the advertising community, “There is a high appetite for that, especially with the more sophisticated agencies,” said one cable ad sales official, speaking on background. “They recognize the audience is still the audience, but they’re going to consume in different ways on different platforms and devices.”
The IP streaming environment introduces a lot of nuances when it comes to calculating the value of ads, the official added. “We have to discern what’s new viewership and what’s replacement viewership,” he said.
In other words, is the viewer someone who would watch the program on the TV set but, because they have the option to watch on an iPad, choose to do so in the backyard or is it someone watching programs they otherwise wouldn’t be watching by virtue of their preference for using a personal device to access their entertainment?
“In all cases the more sophisticated advertisers and agencies are saying, I’ve got to be able to follow that audience,” the official said. “If it’s viewers who are eroding from my linear set-top box stream, I have to retain those eyeballs no matter where they go. If there are five people sitting in the living room with five different devices, those are new eyeballs. So there may be some more money for them.”
The granularity and thoroughness of the data in the unicast domain make such parsing possible. “We don’t know who’s watching, but we can tell this device is watching for this amount of time and this level of engagement,” he said. “So there are certain differences that we can draw from the data.”
As cable operators create the support infrastructure for dynamic advertising on linear IP TV the revenue opportunity extends beyond what they can sell directly from their own local spot inventory to the larger national programming arena, much as has been the case with the implementation of dynamic ad capabilities on the legacy and IP VOD side. Once an infrastructure like TWC’s is in place, it’s a matter of pointing the system at whatever URLs fit into the negotiated placement scheme, just as is done with the spots controlled by the MSO.
Of course, he added, there’s a whole lot of haggling that has to go down before such engagements enter the picture. But at least it’s now clear the technology is available to make it happen.
One thing working in everyone’s favor is that as things move into the IP domain the technology can be leveraged across multiple platforms, a point that came up in the New York TVOT conference. As ever more content moves to the IP platform, the advertising processes and advanced capabilities become common to whatever devices have access to that content, including set-tops.
It also helps, as Comcast’s Matt Strauss noted, that operators are creating a foundation that can support multiple approaches to advertising in the IP domain. “We’re not trying to actually determine what the right model is when it comes to advertising,” Strauss said. “I think you’re going to see a lot of experimentation from programmers. And there very well may be certain platforms that lend themselves to different types of advertising models, formats, maybe even different monetization models. We just want to supply the tools.”