August 3, 2009

Ads Creeping Into On Demand Services

On demand TV services, known to allow users to fast-forward through bothersome commercials, may soon be filled with a new kind of ad.

Channel guides and services like TiVo are in the process of developing a new type of ad that will be tailored to its users, according to the Associated Press.

However, the new ads are designed to appear more like online ads than traditional TV spots.

Additionally, the new service is being marketed to advertising firms as a way to reach targeted audiences who are likely to be more receptive to their message.

"People like to shop. People like to research products," Charlie Thurston, president of the advertising sales division at Comcast, told the AP.

"Where advertising is intrusive is when there's a complete mismatch between product and viewer."

Comcast completed an advertising trial last year in Huntsville, Alabama which found that users who received ads for more relevant products and services were likely to watch them 38 percent longer than people who saw ads that did not appeal to their interests.

In 1981, ad revenue on cable TV was at estimated to be $100 million. In 2000, revenue had increased to $10.5 billion, and has since doubled to $21 billion, according to SNL Kagan.

Time Warner Cable Inc. has begun offering traditional ads along with clickable Internet-like banner ads that allow viewers a new sense of interactivity in gaining more information from advertisers.

When TiVo was introduced, users viewed it as a way to opt out of bothersome ads by fast-forwarding on to the program they wanted to watch.

However, TiVo has begun offering clickable ads when viewers pause programs, fast-forward or delete programs.

"We were once a foe of the networks, now we've become a friend," Tara Maitra, TiVo's general manager of content services and ad sales, told the AP.

"We're working with the industry ... to get users to engage in a world increasingly equipped to fast-forward through commercials."


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