Articles and White Papers

Opportunity to Advance: A Guide to Video On Demand Advertising

Differentiation is increasingly difficult - and crucial - in a crowded marketplace. Successful companies must find ways to rise above the competition and become more efficient at finding and reaching the right consumers with the right offers at the right time.

For local and regional marketers the task is made more challenging by shrinking or restricted budgets. In the fight for consumer dollars, it's never been more critical to stand out - and never more necessary to stretch advertising investment and maximize results.

As the world goes more interactive, and as television joins the evolution, the most successful and forward thinking marketers are profiting from advanced advertising applications. Video on demand (VOD) is one such application that is enabling more targeted, personalized and effective consumer interaction.

New Technologies, New Choices

Advances in technology are changing the way Americans live, learn, work, play and purchase. Some of the most significant advances are taking place in the media. Revolutionary developments in cable television technology are helping to transform viewing habits and marketing methods. Video on demand is on the leading edge of this progress.

What is video on demand? The name says it all. VOD is simply unscheduled video content that is available for viewing anytime the consumer chooses. It runs outside of normal programming and is delivered on channels dedicated to ad-supported VOD content. VOD is available in most homes that subscribe to digital cable - approximately 75%, according to Forrester estimates. That translates to roughly half of all cable TV subscribers in the United States.¹

The growing presence of VOD offers tremendous opportunity for marketers to target and engage qualified consumers with customized messaging. While video on demand delivers greater flexibility and choice for viewers, it also presents advertisers with the choice of sponsoring existing content or hosting original programming.

Benefits of VOD Advertising

As a largely untapped medium to date, video on demand enables cost-effective competitive differentiation for marketers of all sizes.

Leverage the power of television. Though the marketplace has seen the emergence of a multitude of digital media platforms - online, mobile phones, PDAs and laptops - nothing beats the quality experience of television viewing. An innovative time-shifting, or time-neutral, technology like VOD offers consumers new ways to enjoy TV and provides advertisers new ways to utilize traditional media.

Enjoy flexible format options. VOD supports a variety of TV ad formats, including conventional embedded spots, ad overlays, bookends, and even long-form videos like product demonstrations, interviews or infomercials. More than a place to simply repurpose existing 30-second spots, VOD offers a viable platform for delivery of creative, customized content.

Target qualified consumers. Some see personal, on-demand TV programming, with its high level of choice, as a threat to marketers. Arguably, the opportunity is far greater. Research indicates a 3-to-1 viewer preference for ad-supported VOD content over paid ad-free programming.² That means a captive audience, and for viewers of original programming from marketers, it means express interest from a qualified prospect.

Personalize the message. Having reached qualified prospects, flexible VOD advertising enables marketers to deliver more relevant, impactful content. Based on comprehensive market research, companies can create effective campaigns that closely align with viewer interests and needs.  

Build deep consumer relationships. To win in today's marketplace, one-way communication from marketers is rarely enough. Advertisers must engage in meaningful conversation with consumers. VOD enables greater interaction with an active community of viewers - entirely on the viewer's terms. Success hinges on the marketer's ability to select ad formats that value long-term relationships and results over bullied branding.

Integrate with other technologies. The benefits of VOD don't end with the TV. Technology is available to integrate online and mobile functionality with a viewer's VOD data, enabling marketers to reach consumers through multiple platforms and devices. Even social media applications may be integrated to permit viewers to share or recommend VOD content.

Cox Media offers a full range of innovative video on demand advertising solutions. For more information about VOD, please contact your local Cox Media representative on coxmedia.com.

¹ Simon McGrath, "TV, The Internet and VOD Advertising: It's All About Choice," Online Video Insider, 2 March 2009, available at http://www.mediapost.com/publications; accessed 21 September 2009.

² Simon McGrath, "VOD Advertising: Could the Ad Model That Killed TV Bring It Back to Life?" Chief Marketer, 24 February 2009, available at http://chiefmarketer.com/advertising/cable, accessed 21 September 2009.