NEW YORK, May 11, 2011 /PRNewswire/ -- The Phase I survey of the Advanced Advertising Media Project (AAMP), an industry-wide research initiative to measure the impact of advertising within free video-on-demand (VOD), yielded insight on the diversity of attitudes toward VOD advertising; the importance of marketing VOD as a product; and the need for a better understanding of consumer behaviors. The study further surfaced the overarching belief that free VOD has the potential to play a unique role in the television ecosystem as a platform for relationship marketing between advertisers and consumers. These central findings were among the baseline needs identified for VOD television programming to achieve its potential as an advertising medium.
In findings presented today by Carl Fremont, executive vice president and global media director for Digitas, AAMP co-founders the 4A's and BlackArrow shared the results of an extensive study among key thought leaders and influencers in the media industry. The research points to a continued horizon of expectations regarding VOD, including a role for the platform as a bridge that connects linear TV and online environments.
"There was a clear sense among all participants in the study that VOD offers unique strategic advantages to service providers, programmers and advertisers," said Mike Donahue, executive vice president, 4A's. "At the same time there was widespread affirmation that VOD is advanced television - not simply an alternate form of Web-based video, and as such requires specific agency approaches that maximize its value to consumers and the media industry."
Designed to reveal a baseline understanding of industry perceptions and opportunities related to dynamic VOD advertising, the AAMP Phase I media insights study included more than 20 in-depth interviews with media industry thought leaders. Among the most widespread findings:
- Long-held attitudes and perceptions remain that VOD is a medium full of potential — but hampered by a lack of established business practices. At the same time, respondents were definitive about VOD's massive opportunity for growth and viability as an advertising platform.
"Our VOD growth has been phenomenal, as we are actually seeing good VOD growth numbers across the board and have been for a number of years," noted a programmer advertising sales executive. "I think it goes back to that fundamental or philosophical question, which is: Is it marketing your own shows and driving tune-in? Or, is it about…extending your reach and providing ad impressions?"
- Metrics that approach established measurement tools already in use within the industry were identified as critical to helping advertisers understand the value of on-demand placements.
"If you can use existing metrics that everybody sort of accepts, but use them in a way that helps us understand and demonstrate what we want to show, I think you are better off," commented one programmer research executive. "Any metric we have is always, in some way, a proxy for a real gain: 'Did we sell more Coca-Cola today?'"
- Full-scale research is required to gauge consumer awareness and usage of VOD, as well as reactions to advertising in a VOD context – where little visibility exists today.
"I really don't think we understand what consumers decided about VOD and what they really want and expect…Right now, I think a lot of people are thinking, 'Oh, let's just throw in a bunch of commercials like we do on regular TV and we will make money'. I don't think that is going to happen," noted one cable distributor executive.
- VOD needs to be packaged as a product, and marketed to both advertisers and consumers in new ways that highlight the unique qualities of the VOD medium.
"How that inventory is presented to the market has the furthest to go. I am not sure that the merchandising of the platform and the way in which it will be brought to market actually matches well with the functionality provided," according to a cable operator VOD executive.
- VOD affords an opportunity for advertisers to connect to consumers in a highly engaging, focused viewing environment.
"VOD offers the consumer the ability to manipulate time, content and access, in ways I don't get to do in linear TV…Now we are talking about not CPM or impressions, but going further into the relationship-building process with the consumer," noted a senior advertiser marketing executive.
Among the companies that participated in the survey were A&E Television Network, Cablevision-RASCO, CBS, Combe, Comcast, Digitas, Discovery, FOX, General Motors, Interpublic Group (IPG), Mediasmith, MediaVest, NBCU, Rainbow Media and Starcom. An abbreviated version of the detailed Phase I study is now available for download from the AAMP website, by visiting http://aamp.blackarrow.tv.
Today, the AAMP working group has completed the test design and has defined the parameters of the second phase of the study – a VOD research lab that explores and validates consumers' responses when engaging with advertising in simulated VOD versus traditional TV environments. Phase II is expected to be complete by the end of the summer.
"It is way too hard [to sell and manage VOD advertising,]" said one network ad sales executive involved in the Phase I study. "But, we believe in it as a medium. It is funny: my team will moan and complain about it, but nobody wants to give it back to the television team, because we still believe it is the future."
The Advanced Advertising Media Project (AAMP) is an industry-wide research initiative created to measure the effectiveness of advertising within on-demand television programs. The multistage project is comprised of three parts: an in-depth industry survey, a consumer VOD media research laboratory, and a live, in-market trial. AAMP participants include stakeholders from various disciplines around the industry, including 4A's, A&E Television Networks, ABC, BlackArrow, CBS, Comcast, CTAM, Digitas, Discovery Communications, Horizon Media, Intel, NBCU, NDS and Rainbow Media, among others. http://aamp.blackarrow.tv
About the 4A's
The 4A's is the national trade association of the advertising agency business. Its membership comprises virtually all of the large, multinational agencies and hundreds of small to mid-sized agencies across the country. The 1,200 member agency offices served by the 4A's employ 65,000 people; offer a wide range of marketing communications services, and place 80 percent of all national advertising. The management-oriented association helps its members build their businesses, and acts as the industry's spokesperson with government, media, and the public sector. www.aaaa.org and @4As.
About BlackArrow, Inc.
BlackArrow is a leading worldwide provider of advanced advertising technology for New Television platforms. The company's multiplatform advertising system is designed specifically for video content distributed over any on-demand platform, enabling networks and content distributors to maximize advertising revenues. BlackArrow is privately held, and backed by Cisco Systems (NASDAQ: CSCO), Comcast Interactive Capital, Intel Capital (NASDAQ: INTC), Mayfield Fund, Motorola Ventures, NDS Group, LTD. and Polaris Venture Partners. The company has offices in New York City and San Jose, Calif. http://www.blackarrow.tv
BlackArrow is a trademark of BlackArrow, Inc. All other trademarks are property of their respective owners.