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How to Test Digital Addressable Advertising

During 2007, digital addressable advertising will emerge in cable TV, and in the years to come will be a key, long-term growth driver for hardware, software, and service vendors, reports In-Stat. While I share In-Stat's enthusiasm for the upside opportunity, I'm focused on the emerging applications -- not the platforms.

The worldwide annual value of digital addressable advertising equipment, software, systems, and services is likely to exceed $540 million during 2011, the high-tech market research firm says.

"There are over 8,000 headends in the U.S. cable TV market, and probably that many more throughout the world," says Gerry Kaufhold, In-Stat analyst. "Many of these headends are older, analog systems that are not likely to provide digital addressable advertising capabilities. However, In-Stat believes that well over 4,000 cable headends throughout the world will have two-way, digital capabilities by the end of 2011."

That said, before investing in expensive new systems, I believe that anyone with a little imagination can start to test the market for highly targeted advertising and thereby hone and develop a sense of how to apply this new rich media marketing capability.

New video arrangement tools, such as vod:pod, enable the compilation of existing topical videos around a theme and thereby create a targeted channel or "pod" -- as an example, I compiled videos featuring the up-and-coming British independent recording artists Imogen Heap and Corinne Bailey Rae.

Since vod:pod provides the option to upload my own video content, I can easily insert short-form (15 second) and long-form (2 minute) video ad segments into the flow of the channel, and test viewer reaction to the content in real-time -- because their platform already includes user commenting. For those viewers so inclined, they can also rank my ad content on a scale from one to ten.

My point: to all those marketers who have had innovative ideas for new adverting concepts, but couldn't justify the production, distribution and testing costs associated with the traditional broadcast industry, you now have an alternative.

Moreover, using the widget capabilities inherent in the vod:pod platform, I can post my narrowcast video player anywhere on the Web that I can paste a javascript. Just imagine the possibilities.

In-Stat's market study found the following:

- Digital addressable ads will help to expand the market for cable TV advertising services.

- VOD and HDTV will provide long-term growth for cable TV addressable advertising products.

- With Switched Digital Video (SDV), cable operators will find an expanding market for digital addressable advertising that supports "narrowcast" TV program streams.

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