As Cable television providers test the waters of on-demand programming in the early days of the medium, some have begun to test user preferences in local markets for viewing hyper-local content in an on-demand fashion. Comcast in particular has begun to serve coverage of local events on its on-demand programming menu. This includes things such as high school sports, local parades, and local interest news stories.
This is an interesting move for Comcast, in that it brings local video content into more of pull based delivery mechanism, akin to the development that video is seeing online. The next step could be to integrate small business video advertising to on-demand menus, which would make them more directional and pull based than they have traditionally been in local cable advertising. Comcast already done this to a certain extent with its Spotlight classifieds ads.
Local cable has traditionally been the medium through which small businesses can advertise with video. Comcast and others even have sales channels already in place for this. But the growing adoption and exposure of local video advertising thanks to, TurnHere, Spot Runner and others, should increase demand among small business advertisers for video.
At the same time, it could be the right time for the fusion of local directional advertising and on demand cable, given the popularity that the latter has shown for cable programming. 54 percent of digital subscribers watched an on-demand program, up from 35 percent in 2004, according to the Cable & Telecommunications Association for Marketing. Jupiter research also reports that about 35 million U.S. households subscribe to digital cable. For local on demand content specifically, Comcast reports 2 million views for the first quarter, compared to 3.7 million views for all of 2006, according to the Associated Press.
The integration of small business video ads with on-demand programming could involve the capability to view inventory, after seeing, say, an auto dealer ad. It might also be beneficial to tie these together with national brand advertising, especially in the case of autos. When I spoke with Vehix.com CEO Derek Mattson in March, he expressed a strong belief that this is where things are headed.
This will bring video content closer to the benefits of search in its ability to target advertising. And as pointed out in The Kelsey Group's most recent User View study (wave IV), online pull based video advertising showed a strong response rate; and reaching consumers in this manner increases the likelihood of reaching attractive and buying empowered users. These demographic factors holds true for broadband users and digital cable subscribers alike.
There is a lot of opportunity here, but questions remain, such as users' desire to pull in local video ads in this venue. Perhaps integrating directory listings could tie video content to the use case of people looking for things locally. Online yellow pages such as Yellowpages.com have begun to talk about this integration.
For this to work, cable providers also have to work on improving the capabilities and search interfaces of their on-demand menus. The looming challenge posed by telco-delivered IPTV offerings, could light a fire under them to start doing this.