Dynamic ads set to generate big bucks

Dramatic growth predicted for ad-servers and ad-splicing equipment.

New markets for ad-servers and ad-splicing equipment are set for dramatic growth in North America, western Europe and Japan, according to new research.

Analyst house ABI Research forecasts that revenues from these new technologies will total US$284m in 2006, and that the equivalent figure for 2011 will be approximately US$1.8bn.

"Trials have shown that while many consumers do not mind paying a few dollars to download a movie, they are less willing to do so for TV programs," said ABI Research principal analyst Michael Arden.

"So cable companies and content providers want to generate revenue from their video-on-demand [VOD] and other services without having to charge a fee.

"In some trials, VOD viewer numbers increased dramatically when the service became advertising-based instead of fee-based."

Traditional ad insertion is a 'one-size-fits-all' affair, while effective advertising is all about customising the message for specific demographics.

This is where the new generation of ad-splicers and VOD servers with ad-server capabilities comes in.

In one example, cable television operator Sunflower Broadband is dynamically placing ads into MTV Networks' on-demand programming.

The ads are inserted into on-demand programs at the moment that viewers request the free on-demand shows.

"The increasing intelligence of ad-servers will mean that providers can insert, for instance, localised 'ticker' ribbons across the bottom of a screen," said Arden.

"They will also offer the ability to click onscreen links or objects to find related information on the Internet.

"They claim that eventually they will be able to identify the demographics of the person currently watching the TV by the choices they make, and deliver suitably targeted ads.

"That implies, eventually, an ad-splicer per household or even multiple ad-splicers per household, hence the dramatic growth we expect in these markets. "

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