While targeted advertising technology has drawn nothing but controversy for broadband ISPs, IPTV service providers and other telco TV carriers may still be able to leverage the idea, starting with the ad insertion capabilities being developed into many vendors' IPTV architecture platforms. Ad insertion technology is advancing to the point where insertion can be done on a national, local or even more targeted basis, and when combined with subscriber profile and management solutions and other capabilities, targeted ads will be the result.
At TelcoTV 2008 last week, a number of companies displayed and discussed ad insertion capabilities, including Alcatel-Lucent, Thomson, Harmonic, Verimatrix and several others. Alcatel-Lucent demonstrated the ad insertion and targeting aspects it announced a couple months ago as part of its Triple Play Service Delivery Architecture 2.0. Elements of the demo included a Targeted Ad Insertion Splicer and Targeted Ad Insertion Agent, the 5930 Interactive Media Manager, the 8660 Datagridsuite, 8920 Service Quality Manager and 5410 Presence Server, all used to aggregate subscriber data and measure responses.
Despite the controversy broadband ISPs have drawn over targeted advertising, the telco TV sector may have learned some lessons, particularly that targeted ad strategies should be offered as "opt-in" services. Thomas Fuerst, senior director of solution marketing for Alcatel Lucent's Carrier Business Group, told FierceIPTV at the show last week, "We recommend our customers use an opt-in model, and offers incentives for the customers to take part, such as limited-time discounts. Targeted ad concerns about privacy will naturally begin to alleviate because there seem to be more willingness on the part of a TV viewer to participate." He said the latter perspective was gained through consumer research that Alcatel-Lucent conducted on the subject.
Targeted advertising, Fuerst said, is still in its infancy, and "got inflammatory before it could be properly explained. Telcos are still building their TV brands and they certainly don't want to jeopardize them. They have an opportunity to openly explain this and realize more of the revenue that cable TV companies have been getting from localized advertising."
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Ad insertion and targeted ads were mentioned during the TelcoTV 2008 keynotes
Alcatel-lucent announced support for targeted ad capabilities in September
Many IPTV execs believed targeted ads would have produced big revenue by now