AdForce Moves Beyond the Internet Into the I-TV Market
The leap into I-TV is part of the company's AdForce Everywhere plan, which extends its ad-serving technology and business model past its initial market, the Internet. The company claims it serves about 750 million ads per month worldwide that cross a host of media.
"What most people recognize us as is an Internet ad-delivery company," said Tim DePriest, director of strategy and new media and head of the AdForce Everywhere initiative at AdForce LLC, Cupertino, CA. "But when we developed our architecture, we always had the thought in mind to extend that architecture into a variety of different media.
"We announced the program in April, and the first phase of that was to deliver ads to wireless devices; the second stage is obviously the interactive TV portion. We've gone after this market, and we have tied up some major players in this industry."
For now -- depending on clients' capabilities -- AdForce will serve a 50-50 mix of traditional static and streaming media banner ads for WorldGate, Liberate, ICTV and MetaTV. This means that customers will see Internet-like ads on their TVs that function just as they do on the Internet -- bringing them to a Web page. DePriest said that in the future, AdForce would leverage its new media relationships to serve full-motion interactive television commercials.
"The traditional network and cable advertisement is something we will be in later on next year, because right now the volume of digital ad distribution in that space isn't large enough for us to go down that path," DePriest said.
"Consequently, the current ad focus is the Internet-type advertising extended into the interactive television environment. But the future ad focus is clearly doing what Wink and RepondTV are doing, which is putting interactivity directly on top of traditional TV ads."
DePriest said that in the future, the value of the ad inventory for interactive television "will be greater than it is on average in the Internet space." The reason for this value lies in the targeted information that digital delivery and closer cable/satellite provider customer relationships can provide advertisers.
"This is really a different type of service because cable operators have a better understanding of their consumers then any generic Web site," DePriest said. "They've got the demographic information of their subscribers right into the home. To get people to opt in to programs where they express their product and service preference and then deliver ads that are closely aligned with those -- that is much easier in this environment than it is on the Web.
"We believe we've got a viable opportunity here to provide value-added advertising services as opposed to the intrusive model of delivering a billion ad impressions and getting a 1 percent click-through rate," he said. "I-TV is a much more comfortable environment for subscribers."
DePriest said that AdForce is in discussions with National Cable Communications. NCC is owned by AT&T, Time Warner, Cox and Comcast and sells national cable ad availabilities. DePriest said the two were discussing ways to sell more I-TV ad inventory.
AdForce not only will serve ads for WorldGate, ICTV, Liberate and MetaTV, but these four companies also will give the ad server another boost into the vital cable and satellite provider industry for further expansion within I-TV and more traditional ad media.
WorldGate, which is live to more than 43,000 homes, is a Web-on-TV experience designed by WorldGate and brought to the cable operator, which sells it to subscribers. ICTV, which is in the testing phase, brings the capabilities through which the cable operator can develop its own WorldGate-type service. Liberate provides a middleware solution to enable the cable operator to infuse interactivity into programming and services but is not developing that on behalf of the cable operator. MetaTV -- which, like ICTV, provides cable operators with their own branded I-TV services -- recently signed a deal with Pegasus Communications to develop the first I-TV portal for satellite broadcasts.
DePriest said AdForce already was doing pilots with Liberate and ICTV that have "opened up more doors to cable operators than we had before."
The other companies announced -- Planetweb, Set-Top.com and On Command -- provide more genre-specific I-TV services.
Planetweb is responsible for people being able to play Sega Dreamcast games over the Web and through their television sets. This means AdForce will serve ads directly to a gaming console.
On Command is one of the largest providers of interactive television and video on demand to the hospitality industry. The company provides these services to nearly 3,500 hotels that account for nearly 1 million rooms. DePriest said that On Command is working on developing a "walled garden" in which it will sell, and AdForce will serve, local ads to hotel guests.
The most intriguing of the bunch may be Set-Top.com. DePriest said that Set-Top.com is a small company with bright engineers who have developed a new type of banner ad. The banners allow I-TV users to click on the ad, and instead of going to a Web site, viewers are brought to a TV channel.
The biggest hurdle to the progress of AdForce's involvement in the I-TV realm is educating the ad agencies creating the interactive ads that AdForce will serve and the firms selling them, DePriest said.
"Ultimately, it's the creative agency that has to create these advertisements," DePriest said. "There are so many formats that they've got to accommodate that the speed in which they can respond to the market opportunity is really dictated by how quickly the formats develop.
"There is also an issue right now with ad rep firms that this is a new environment, [and] they've got to come up the learning curve, and I don't think they are quite up to speed yet."