BlackArrow, ad agency the 4A's, CBS, Discovery and Comcast, have banded together to try to find the best way to cash in on the popularity of free video-on-demand TV programming.
The end result is the Advanced Media Project (AAMP), which made its official debut today. Nick Troiano, president of BlackArrow, said some of the founding members got together in the fourth quarter of last year to think about how they could jumpstart advanced advertising in VOD.
Citing statistics from Rentrak, Troiano said there were over 7 billion VOD views last year for cable operators, with Comcast alone counting for 4 billion views. Despite VOD's popularity, there hasn't been any in-depth research on advanced advertising in VOD.
"Some of the technology hurdles that have long existed that have limited dynamic ad insertion on VOD are coming down as well as some of the business and operational issues that were associated with making ad insertion possible," Troiano said. " It's pretty clear that in order to make ad insertion in VOD a viable medium for all participants we had to start thinking about how to change the perception of VOD in the industry. Ad insertion has been promised for a very long time and it has had some fits and starts beyond the technology and operational business constraints that are coming down.
"We felt that we had to help change the perception so one of the reasons that AAMP was formed was to try to change that perception."
Troiano said that while "there have been tons of studies" done on ad effectiveness on linear, DVR and online advertising there previously wasn't any focused, research-based initiatives around VOD advertising.
"In order for advance advertising in general, whether it's VOD or linear or EBIF, to take off for television it requires collaboration among all of the stakeholders; programmers, operators, agencies and advertisers," he said. "When we thought about AAMP we knew it needed to be industry wide and an industry led initiative. It couldn't be just one group or another group because in order for ad dollars to flow there needs to be coordination and communication between all of the constituents."
Other announced participants in AAMP include A&E Television Networks, Digitas, Horizon Media, BlackArrow investor NDS and Rainbow Media. Troiano said it was important to have an online ad agency, such as Digitas, involved in the program.
In order to get a better understanding of dynamic advertising strategies for free VOD, AAMP has taken a three-phase approach. The first phase was designed to provide a level set understanding of industry perceptions and opportunities related to dynamic VOD advertising.
AAMP interviewed more than 20 media thought leaders from 18 different companies for the first phase with results slated to be released next month.
"We asked them a whole slew of questions to try to get a secure baseline and understanding of key industry perceptions, limitations and concerns, both business and technical, on how do you make VOD a viable advertising medium," Troiano said. "The results are essentially a blue print on how to move forward on making VOD viable as a medium so we're real excited about that in the first phase of AAMP."
The second phase, which is underway, is focused on engaging consumers in simulated VOD and linear environments with results available later this summer. The second phase, which will end in June, is comprised of 500 consumers in Los Angeles and 500 in New York City.
Phase three, an in-market test, will employ the collected media lab data as a basis for comparison with real-world results in a live, consumer trial. The live consumer test will take place in late summer and will include cable operators.
While AAMP is tackling dynamic ads in the VOD environment, Canoe Ventures and its partners are conducting their own "CEE MEE" project that focuses on interactive TV advertising.
Troiano said the CEE MEE project was "very complimentary" to AAMP since both seek to raise the awareness and viability of advanced advertising.
The members of AAMP each paid an equal amount to join the project and will equally share in the results. Troiano said other companies could join the AAMP project.