iTV Firms Boost Ad Products for VOD

More players in the fledgling interactive TV space are racing to roll out advertising products, this time with two competitors introducing new services for embedding targeted ads into video-on-demand (VOD).

Two such firms, Concurrent and Everstream, are teaming up to join the former’s VOD server with the latter’s S4 Campaign Director ad insertion software. The resulting enhancements to Atlanta-based Concurrent’s MediaHawk server will allow networks and distributors to offer targeted advertising, the companies said.

“Concurrent’s VOD platform with our embedded software provides operators with ad revenue in addition to their existing movie and subscription revenue. Our goal is to assist operators to maximize the revenue potential of VOD and on-demand content through one-on-one, impression-based, interactive and optional targeted advertising,” said Stephen McHale, president and chief executive at Cleveland, Ohio-based Everstream.

The agreement also entails Concurrent’s making a $500,000 equity investment in the smaller firm.

At the same time, rival SeaChange International said it had plans to deploy advertising enhancements to its own video-on-demand system. The nine-year-old, Maynard, Mass.-based firm said it had already signed cable company Adelphia Communications as one of its first customers for the service.

The announcements by SeaChange, Concurrent and Everstream come just days after OpenTV , the nation’s largest iTV middleware player, unveiled its own targeted ad server.

The growth in interactive TV advertising applications comes amid renewed worries about the possibility of offline media being cannibalized by Americans’ growing Internet use. According to a survey released Thursday, at least one key group of purchasers — women with children — is reporting that their of the Web is supplanting TV-watching.

According to some thinking, rolling out interactive TV would not only keep eyeballs glued to the television for longer, but would also increase television advertising effectiveness through the use of targeting.

“We expect that the developing model for ‘everything-on-demand’ will have a significant advertising component,” said Concurrent President and Chief Executive Jack Bryant.

Yet despite the interest in iTV advertising and the recent influx of new products, concerns still linger over how consumers — and the government — will react to the user profiling that many firms plan to undertake to deliver these targeted ads.

Last June, the Center for Digital Democracy published a widely-discussed report criticizing what it believed is marketers and media companies’ willingness to bend existing regulations so that they can collect consumer data.

Supporters of targeted interactive TV ads, such as the Association for Interactive Marketing, challenge such reports, claiming the profiling plans violate neither existing law nor consumer rights.

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