By: Ian MacLean

Late last week the CMDC and TVB organized the industry to dissect the current state of the VOD nation in Canada, deciding to implement a test to determine the size, profile and viewing habits of the Canadian audience.

Ian MacLean, VP of communications at Media Experts, attended the meeting and offers an alternative to the current VOD ad model, saying TV sponsorships are the way forward for the platform.

We Canadians love our TV and are clearly enamoured with the convenience and control of our VOD services as the 72%* of us with digital TV subscriptions stream millions of VOD sessions each year. As with all of the on-demand viewing platforms available to Canadians, the Broadcast Distribution Undertaking (BDU) VOD environment presents its own set of opportunities and challenges for advertisers.

This scenario concerns advertisers whose commercial in the original broadcast is time-sensitive. Their offer has expired, Black Friday has passed into Saturday or, it is hoped, there is simply no more product available. No brand wants to disappoint a consumer, unable to satisfy the interest generated by their advertising. And, of course, there is the need to respect the talent cycle fees associated with TV creative.

Let’s consider another option. One that leverages the VOD environment and viewer behaviour to create a sensible value exchange for all the stakeholders.

Rather than simply re-running all the commercial messages in the original linear TV broadcast, why not provide an exclusive, sponsored environment where a single brand could book-end the content with sponsored billboards and run a series of messages enabling them to tell a deeper brand story?

The Voice would provide a contextually-rich environment for Dove to expand on their mission to help women embrace their unique beauty, while The Amazing Race presents an ideal environment to promote the benefits of Interac’s Flash card. Whirlpool, Kitchen Aid or Henckel Knives would find receptive viewers settled in to catch up on MasterChef Canada.

The VOD viewer is very engaged, and desirable, as they have visited a BDU’s menu and selected specific content to stream on their schedule. They are seated in their favourite chair, feet up, focused on a big screen. These are valuable, engaged impressions. Calculating their market value will be critical in sorting out the economics of commercial VOD, and that’s another discussion that’s on the horizon.

By strategically selecting programming for exclusive sponsorship, advertisers would benefit from exposing their message to engaged viewers in a contextually-relevant and commercially uncluttered environment. As an added benefit, there is a wealth of data, already collected by Canada’s BDUs, on what VOD content is being viewed by geography, by session length (viewing completion rates), number of views and time of day, all of which would be of great interest to brands in the context of their broader advertising initiatives.

The celebrated economist John Maynard Keynes once noted, “the difficulty lies not so much in developing new ideas as in escaping from old ones”…old habits die hard.

In the near future we’ll see Canadian BDUs’ distribution platforms updated with a cost-effective technology solution that allows dynamic ad insertion in VOD assets. It’s not science fiction. It is a reality in some VOD networks in the US as you read this. It is the obvious model as it enables the participation of any TV advertiser in VOD regardless of the time-sensitive nature of their offer. It also provides an elegant solution to managing talent cycle fees. Only business issues between broadcasters and BDUs need to be overcome.

VOD is the natural place to start ad insertion in Canada and is an important evolutionary step in achieving the Holy Grail of dynamic ad insertion in live, linear broadcast. When we, as an industry, collaborate to make that happen, we can then fulfill the promise of household addressability, trading live TV ad inventory programmatically.

In the interim, an exclusive content sponsorship model, with multiple brand ads that allow an advertiser to tell a deeper story, would serve both consumer and advertiser while taking initial steps to further monetize the VOD platform for broadcasters and the BDUs hosting and distributing TV content to Canadians.

We don’t have to hit fast-forward right now. But let’s start by pressing play.

*CRTC – 2013 Communications Monitoring Report