Market dimensions, forecasts and research around cable and multichannel video advertising
The content of the pages of this website is for your general information and use only. It is subject to change without notice.
Neither we nor any third parties provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness or suitability of the information and materials found or offered on this website for any particular purpose. You acknowledge that such information and materials may contain inaccuracies or errors and we expressly exclude liability for any such inaccuracies or errors to the fullest extent permitted by law.
Your use of any information or materials on this website is entirely at your own risk, for which we shall not be liable. It shall be your own responsibility to ensure that any products, services or information available through this website meet your specific requirements.
This website contains material which is owned by or licensed to us. This material includes, but is not limited to, the design, layout, look, appearance and graphics. Reproduction is prohibited other than in accordance with the copyright notice, which forms part of these terms and conditions.
Unauthorized use of this website may give rise to a claim for damages and/or be a criminal offense.
From time to time this website may also include links to other websites. These links are provided for your convenience to provide further information. They do not signify that we endorse the website(s). We have no responsibility for the content of the linked website(s).
Your use of this website and any dispute arising out of such use of the website is subject to the laws of the United States of America.
ZoneWire respects the privacy of our readers, and treads very gently when it comes to privacy. Here are the particulars:
General site use and user statistics: www.zonewire.net uses Google Analytics to collect visitor data and analyze traffic on our site. This information helps us understand reader interests, helps us improve our content, and helps us sell advertising and sponsorships by demonstrating overall traffic levels and patterns.
We share only aggregated traffic indicators, and no personally identifiable information, with third parties. We do not sell, give, or trade personally identifiable information to any third parties for marketing purposes.
Subscriptions: ZoneWire makes an electronic newsletter available to qualified readers who select it using an online form found on our website. We deliver the newsletter via an online newsletter management service, Mail Chimp. To do so, we require collecting a valid email address and other personal information (name, company, title and other fields). We do not make this personal data available to third parties, and we do not use it to try to sell you anything. We just use it to send you your newsletter.
Comments: We invite reader comments to be submitted through zonewire.net. Doing so requires that you register by providing a user ID, email address and location. These requirements help us to weed out nonsensical and/or inappropriate comments, and are not shared by us with third parties.
What information do we collect?
We collect information from you when you subscribe to our newsletter.
When ordering or registering on our site, as appropriate, you may be asked to enter your: name or e-mail address. You may, however, visit our site anonymously.
What do we use your information for?
Any of the information we collect from you may be used to improve our website and to send periodic emails. The email address you provide for subscription requests will be used to send you the content you requested and for occasional (if ever) verification email messages.
Yes. Cookies are small files that a site or its service provider transfers to your computers hard drive through your Web browser (if you allow) that enables the sites or service providers systems to recognize your browser and capture and remember certain information.
Do we disclose any information to outside parties?
We do not sell, trade, or otherwise transfer to outside parties your personally identifiable information. This does not include trusted third parties who assist us in operating our website, conducting our business, or servicing you, so long as those parties agree to keep this information confidential. We may also release your information when we believe release is appropriate to comply with the law, enforce our site policies, or protect ours or others rights, property, or safety. However, non-personally identifiable visitor information may be provided to other parties for marketing, advertising, or other uses.
Third party links
Occasionally, at our discretion, we may include or offer links to third party content on our website. These third party sites have separate and independent privacy policies. We therefore have no responsibility or liability for the content and activities of these linked sites. Nonetheless, we seek to protect the integrity of our site and welcome any feedback about these sites.
Childrens Online Privacy Protection Act Compliance
We are in compliance with the requirements of COPPA (Childrens Online Privacy Protection Act), we do not collect any information from anyone under 13 years of age. Our website, products and services are all directed to people who are at least 13 years old or older.
5303 E. Evans Ave.
Denver, CO 80222 US
Okay, class: Here's the fundamental explanation of what "local cable advertising" is all about.
We're actually going to start backwards, by telling you what local cable advertising isn't. It isn't the commercials that play nationally on a cable network. In other words, when you watch a national cable network -- let's say ESPN -- and you see two commercials back-to-back for Budweiser and Scott's fertilizer products, you're watching national ads, not local spots. Those same two commercials are seen simultaneously across the U.S. by anybody who happens to be watching ESPN and paying attention. The Cincinnati Bengals fan in Kettering, Ohio sees the same commercial the Seattle Seahawks fan in Tacoma sees.
So we eliminate that category right off the bat. What does it leave us? With a smaller number of "local" commercials that appear within the same ESPN network signal, but are clearly meant for local audiences only. Here are the three main categories of local cable advertising.
Local advertising insertion. Cable TV networks like ESPN give 2 or 3 minutes of advertising time each hour to their video distributors -- the cable, satellite and telco-video companies that constitute the "pay television" industry. These are companies like Comcast, DirecTV and Verizon's FiOS TV that collect monthly payments for television service.
A couple of times per hour, they'll insert local commercials into the program breaks provided by their network partners: ESPN, MTV, HGTV and the like. This is mainstay inventory for local cable advertising. The way local ad time is allocated is essentially identical to the way television advertising works in the over-the-air, broadcast TV domain. The big broadcast networks (ABC, CW, FOX, etc.) also give some time to their local TV station affiliates to sell to local advertisers.
But there are key differences. To a broadcast TV station, a "local" commercial plays out across the entire reach of the TV station's over-the-air signal, or, in official FCC parlance, its Grade B Contour. That means, for example, that in Denver, the local commercial played out by the ABC network affiliate KMGH-TV shows up in central Denver's swank Cherry Hills neighborhood, and it also plays in the mountain community of Evergreen, Colo., about 30 miles to the west. Same commercial, same TV station, market-wide coverage. Cable companies have a very different geographic profile, however. Because of the way their physical networks are stretched across a metro area, cable companies have the ability to parse the reach of a local commercial much more granularly, by selected geographic "zones." Again using Denver as an example, the local cable operator Comcast can place several different commercials into the same program break provided by ESPN, with each playing out at the same time into a different zone within the broader Denver market. Thus, the viewers in Cherry Hills might see a different 30-second commercial than viewers in Evergreen, even though they're watching the exact same cable channel at the exact same time. It's a nifty feat of geo-targeting that sets cable apart in the local television marketplace.
Regional or national "spot" cable. Beyond single-market local ad insertion over cable (Denver, for instance), it's also possible to play commercials out over multiple local cable geographies. Imagine a footware retailer with locations across the southeastern U.S.. To advertise a big back-to-school sale on running shoes, the store owner might decide that it makes sense to target teens who watch a lot of BET and MTV. But because the retailer has a regionalized presence, it probably doesn't make sense to buy a national commercial on MTV. Why pay to reach viewers in San Diego, Dallas and Boston when there are no stores in those markets? At the same time, the retailer's ad agency may find it arduous to make separate local cable purchases from separate cable companies across a dozen more more cities in the southeast, where it does maintain stores. The solution is known as "spot" cable, or "national spot" cable. (This latter term is confusing, in that buyer really aren't buying a "national" footprint. "Regional spot" would be a better description. Nonetheless, it persists.) The "spot cable" market allows an advertiser to contact a single sales organization that will take on the work of making sure the right spots are televised on the selected cable networks, only in the markets they want. And anymore, chances are that "single sales organization" is one company. Owned by three large cable companies, it's called NCC, and you can find its website here. The spot cable market is growing as advertisers warm to the idea of making regionally concentrated buys across multiple cable geographies. Political candidates, in particular, are spending more on the medium.
Household-specific advertising. One last level of "local" cable advertising is the smallest, but the most intriguing and the one many are looking to for rapid growth. Also known as "addressable" advertising, it refers to the ability to associate commericals with individual households, not just broad geographic zones. Here, it's possible that next-door neighbors who happen to be watching the same national cable network at the same time might see entirely different commercials. One household, which includes children, sees a spot for a restaurant that features a Family Night special. Next door, the childless couple sees an ad for a high-end automobile. This emerging market features the most granular interpretation yet of a "local" commercial -- one that's directed at an individual cable-subscribing household.
Looking for one? Hiring? Proceed directly to cable/broadband advertising sales guru Jim Birschbach and MediaRecruiter.com.
Thank you for your submission. Zonewire will respond shortly.
DIGITAL VIDEO INSERTION: The placement of commercials into cable or multichannel video program streams using storage and server equipment that translates video content into the binary code of computing. Digital ad insertion systems, now common in the cable advertising industry, originated in the 1990s as an alternative to cumbersome and sometimes-unreliable tape-based insertion systems.
DYNAMIC VOD ADVERTISING: It’s not that VOD advertising isn’t compelling, or “dynamic” in its own right. But here the term refers to the ability to customize the advertising messages appearing within video-on-demand program streams requested by TV viewers. Early in the medium’s development, commercials typically were hard-coded into VOD programs – meaning anybody who ordered a particular episode of a show saw the same commercial. Dynamic VOD advertising allows providers to send different commercial messages to different viewers, depending on household demographic characteristics and other indicators. The behind-the-scenes process is complicated, and bringing scale to its deployment has been challenging, but dynamic VOD advertising remains a signature cause for the cable advertising industry, and its availability is steadily rising.
EBIF: Some of the most promising interactive TV advertising concepts revolve around an odd-sounding technology called EBIF, for Enhanced Binary Information Format. Invented by the cable industry’s research and development arm, CableLabs, it’s a compact but powerful software specification that’s embedded in millions of cable television set-top receivers, and can support some interesting enhancements to traditional (read: passive) TV commercials.
EBIF makes commercials come alive by inviting viewers to respond to what they’re seeing and hearing on the screen. Typically, EBIF-powered commercials include graphic overlays that occupy a small footprint within the total TV screen. Those overlays can do several things. They can invite viewers to request more information about an advertised product – a new sedan, let’s say – by pointing their TV remote control at the screen and clicking. A few days later, a glossy brochure might arrive at the mailbox, or a representative from a local dealership might call with an invitation for a test-drive.
EBIF applications that appear on the TV screen also can invite viewers to find out more information about products or services through longer-form video presentations that appear on the screen shortly after an EBIF overlay is selected. These so-called telescoping applications whisk viewers to an associated video-on-demand program that might offer a virtual tour of our sedan’s interior, for instance. EBIF also supports instant viewer polls that can be tied to advertising campaigns or sponsored contests. There’s little limit to the creativity advertisers can employ to more deeply engage viewers using the interactive TV platform known as EBIF. It supports local and national ad campaigns, so there’s no geographic limit on its suitability.
INTERCONNECT: A collective array of cable and multichannel video providers, typically operating within a common metropolitan or market area, that collaborate to distribute advertisements to more households than any single provider could deliver. Interconnects, which typically offer a single point of sale to advertisers, are designed to overcome complications associated with the geographic fragmentation of the multichannel video industry.
LOCAL AVAIL: The time allotted by national/regional cable networks for local advertisements sold and placed by local cable/multichannel video companies. Most national cable networks offer 2 or 3 minutes of local avails per hour. These time slots are the core asset for cable’s local advertising business.
RFI (Request for Information): A technique for allowing interested viewers to proactively request brochures, catalogs and other follow-up information about products and services they see advertised on television. Using a double opt-in invitation (viewers must affirm they’re interested in more information, and then again verify they’d like it to be sent), RFI offerings are an interesting alternative to legacy direct-mail techniques that push materials to individuals who may or may not be interested in them. RFI was the first national-footprint enhanced advertising product to be introduced by the cable industry’s advanced advertising company, Canoe Ventures.
TELESCOPING: A relatively new technique for enhancing traditional TV commercials with deeper-dive video content that offers demonstrations and explanations of advertised products and services. Telescoping leverages the abilities of video-on-demand infrastructure. When a viewer clicks for more information on a Telescope-enhanced commercial, she/he is actually evoking a discreet video-on-demand stream from a server array maintained by a cable or multichannel video provider. At home, the viewer sees a (typically) 3- to 5-minute video that relates to the original advertisement. Proponents say Telescoping is effective in conveying detailed product information to self-selecting, highly engaged viewers, resulting in a significantly higher propensity to buy.
Here's a quick explanation of how commercials find their way to cable television viewers along three main pathways: national networks, local systems and regional spot purchases.
Questions? Comments? Get in touch!
EBIF triggers. Dynamic insertion. Return paths. Pre-rolls. And that’s just for starters.
Understanding the new language of advanced television advertising is a requisite for participating in a rapidly emerging media sector that could produce up to $4 billion in new revenue by 2014, according to analyst estimates.
So let’s get with it.
ZoneWire, from Stewart Schley Content Services, is all about fostering dialogue, offering education and sharing news about traditional and advanced advertising over cable and other multichannel video delivery systems.
Our hope is that ZoneWire plays some small role in supporting a new, better way to engage audiences through television advertising. By better aligning commercial messages with audience tastes, interests and places, participants in the cable advertising space are (finally) making significant progress in turning TV advertising from an intrusive gambit to a welcome presence in people's lives. Here's to that.
About this Schley guy...
Stewart Schley has written extensively about the media and telecommunications business for longer than he would care to recite, for a range of leading business publications and market research/analysis firms. He does double-duty as a Contributing Analyst for One Touch Intelligence, a provider of expert perspectives on the competitive media and communications marketplace.
More to the point, Stewart has covered the local cable advertising business since 1989 (!). He was Editor and Publisher of Cable Avails, a monthly magazine for the local cable advertising business published by Cowles Business Media, and was the founder and Publisher of CSP: Cable Sales Professional magazine, published by Lundwall Communications. He also wrote the Local Cable Advertising Sales newsletter, published by Multichannel News, from 2005-2007. So them's the credentials.
ZoneWire is made possible (or at least made less charitable) by sponsors that support cable's advanced advertising business. We thank these companies for contributing to the conversation.
Monday, June, 17 2013
Cable’s tablet ad story has a familiar ring
By: Stewart Schley
Monday, June, 17 2013
Remember the early days of cable’s conversion to high-definition television? Then you may also recall that something was missing from the HD versions of popular cable channels like ESPN and HGTV.
The delivery of these channels and others in HD preceded the conversion of local advertisements to the high-resolution, wide-aspect format. So when viewers tuned to, let’s say, the high-def channel for ESPN, the local spots that otherwise appeared in the traditional standard-def ESPN feed weren’t there. It took a while for cable advertising groups to fully integrate HD commercial production and digital insertion into these HD channels.
“Before HD hit critical mass, the technology wasn’t caught up to the point where you could actually insert local commercials into the HD feed,” recalled Cox Media SVP Billy Farina during a panel session at last week’s Cable Show. (Cox Media is the local ad-sales unit of cable company Cox Communications.) Most operators have long since converted their operations so that, as Farina put it, “what the user experiences on the SD screens they’re going to experience on the HD screens."
Why the history lesson? Because there may be a telling analogy between what went on with HD and what’s happening now with the delivery of live video channels to tablet computing devices. For the moment, when viewers fire up cable tablet-video apps on their iPads – at least in most cases – local commercials don’t appear within cable channels on the miniature glass screens.
For now, the absence of local commercials in the live tablet TV apps that cable operators deliver isn’t a huge problem, given the relatively thin viewership the tablet apps currently generate. But over time, as more viewers – and more local advertisers – become accustomed to seeing live TV on tablets, cable companies will need to find ways to integrate local commercials into tablet feeds, Farina believes.
With HD, cable advertising organizations had “a narrow window” to integrate local advertising before there was a vocal uprising among clients, Farina said during the Cable Show panel. “The same holds true for the tablet,” he said. “I can’t tell you where is that tipping point…but I think the tablet viewing is sort of the same problem with the same solution.”
Cox Media has taken a step toward that future by signing an agreement with media measurement firm Rentrak to track viewing impressions across tablet video applications, according to a report by Fierce Cable. The arrangement relates to video-on-demand content over tablets, rather than live TV, but even so, it’s an important ingredient in being able to monetize the insertion of advertising into the IP streams that feed tablets and other non-TV devices.
Meanwhile, advertising technology providers including SeaChange International Inc. and BlackArrow have introducing IP video management platforms that aim to integrate local cable commercials into IP video feeds. “It’s essentially following the viewer across every platform they use,” said BlackArrow President Nick Troiano at last week’s panel.
Photo courtesy of Apple Inc.