My ‘Mad Men’ VOD Experience: What It Means For TV Business Model

Video-on-demand (VOD) is a benefit of a viewer cable subscriptions, but still not front and center in the television ad model discussion. So where does it stand as an ad medium today? I had a chance to find out in a snapshot experience when my family forgot to DVR the first three programs of of the final half-season of “Mad Men” on AMC.

With a bit of dread from previous VOD viewer experiences, we turned to Time Warner Cable’s Entertainment on Demand AMC listings, and hit play. The first hurdle was finding out whether fast-forwarding would be disabled, which is a deal-killer in my home. And wonder of wonders, fast-forwarding is enabled! So on we were carried into the Madison Avenue advertising world of spring 1970.

Here’s the formatting time line of my 55-minute experience. Ads are in boldface:

0:00 – 0:30: Single pre-roll ad for Capital One Venture (:30 Total)
0:30 – 20:00: “Mad Men” program including “previously on” and opening credits (19:30)
20:00 – 21:30: Three-unit ad pod: Jack Daniels (:30), Geico (:30) and CarMax (:30) (:90 Total)
21:30 – 29:00: “Mad Men” program (7:30)
29:00 – 30:00: Two-unit ad pod: Fan Duel (:30) and AMC “Turn” promo (:30) (:60 Total)
30:00 – 37:00: “Mad Men” program (7:00)
37:00 – 38:30: Three-unit ad pod: JCK Daniels (:30), Jet Blue (:30) and Fan Duel (:30) (:90 Total)
38:30 – 44:30: “Mad Men” program (6:00)
44:30 – 45:15: Two-unit ad pod: Deleon Tequila (:15) & Fan Duel (:30) (:45 Total)
45:15 – 45:17: Transitional (:02) billboard for AMC program “Turn” (:03 Total)
45:17 – 51:17: “Mad Men” program (6:00)
51:17 – 52:17: Closing credits (1:00)
52:17 – 52:47: One unit “post-roll” ad for Fan Duel (:30 Total)
The remaining 2:13 is accounted for by ad-loading latency, lead-in and lead-out time and a margin of error on exact timing due to reading minutes rather than seconds on the video player.

Observations
— The total VOD non-program content load for this 55-minute show is at 3:48, a most reasonable 6.3% of total program length. Compare this to linear television, which commonly packs 20 minutes of non-program content into a 60-minute program, or a most unreasonable 33% of viewing time.
— By allowing fast-forwarding, AMC and Time Warner Cable provide a far superior viewer experience, and even got a bit more ad-viewing from me than they would have on linear DVR playback. For instance, when I did fast-forward, the play/pause functions did not jump me back to the start of the program. I found myself rewinding and ended up watching about 10 seconds of the last ad, along with a few seconds of the first ad.
— Dynamic ad insertion is here. While measuring these pods, I sometimes “timed out” on the pause function, and when I returned, rewound and replayed the content. A new ad was then inserted into the position that I had paused on.
— A larger and more diverse set of advertisers are participating in VOD. A few years ago, I would see the same ad, or often the same network promos, again and again within a single program.

What it means
–- When ads do interrupt VOD content for only 90 seconds maximum, it is much more tolerable to a viewer than the sometimes 5-6 minute pods seen on linear television. Does anyone really believe that human beings are actually watching all the ads in those super-pods?
–- Avoiding the strategy of “forcing” viewers to watch ads (by disabling fast-forwarding) can counter-intuitively create more ad viewing.
–- I am glad to see that dynamic ad insertion technology has finally arrived. Advertisers get more reach and less viewer wear-out across a schedule, and viewers are not bombarded with the same message over and over again within a single program.
–-A larger and more diverse number of advertisers indicate that the buying side is waking up to the value of VOD as use of dynamic ad insertion increases.
–-The first :30 pre-roll seems like a pretty sure thing as far as viewability, given an audience’s previous digital experience with video pre-roll. As an advertiser, I would pay a high premium for that VOD unit.
–- Who will cover the current cost/revenue differential for shorter ad pods? I believe the revenue difference should be addressed by both advertisers (higher CPMs for greater value for less ads) and content providers (no longer charging for the mid-pod ads that go unseen). Overloaded ad-formatting was created over time by both advertisers and content providers. As the digital world figures out viewability standards, this rebalancing is a necessary element for television to stay competitive with the accountability of digital video advertising.

 

This article was first published on mediapost.com

About John Osborn

John R. Osborn is an ad agency veteran, formerly Senior VP, Group Media Director BBDO/OMD. For 23 years, he led traditional and new media efforts for clients Visa, Bayer, Eli Lilly, DuPont, FedEx, GE, Charles Schwab, Discovery Networks, HBO, Lifetime Networks and more. John is a longtime advocate for and action-taker around emerging media technologies through the emergence of Cable TV (Pillsbury, DuPont - 1980s), Interactive TV and Internet (Visa, US Navy - 1990s) and online, wireless, Wi-Fi access and Advanced Television (Ultramercial - 2000s). In 1994 he won BBDO's agency-wide Founders Award for work reflecting the BBDO ethic of quality, creativity and effort. Most recently he was Director of Business Development at Ultramercial LLC, an emerging media company providing a unique business model for TV, Online, Wireless and Wi-Fi access. - Author of “The Next Business Model for Ad-Supported TV?”, published February 20th, 2009 in Ad Age Mediaworks - Facilitated and trained agency staff and clients in Creative Ideation sessions at BBDO/OMD. - “Integrating Creative Leadership” Certificate from the Creative Problem Solving Institute. - Past President and Interim Executive Director of Creative Education Foundation (CEF). - Grandson of BBDO co-founder, CEF founder, brainstorming and Creative Problem Solving process co-creator Alex Osborn.
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