OTT Ads “Over the Top”? How Much Advertising Can We Take?

One of the promises of over-the-top video is that, because it leverages the Internet as a delivery mechanism, it can serve up more interactive and personalized advertising easier than traditional Pay TV. The question is, how much more advertising can the average consumer handle, and what form will it take?

One of the things that hit me at the recent IPTV Forum event in New York is that there will be multiple, competing forms of advertising assaulting us on our televisions. For example, one of the big trends this year will be Internet-connected TVs, which 48% of consumers are likely to buy according to the Consumer Electronics Association. These TVs will leverage Yahoo widgets or some other technology to serve up Internet video content, including long-form movies and TV shows from services like Netflix and Vudu, and also snippets of information such as stock quotes and weather. And of course, all of this will need to be paid for. In the case of Netflix or Amazon, this will be paid for by download and subscriptions fees. But you can also count on a healthy dose of advertising being served up in the borders of your TV screen or as pop-up overlays on the screen.

Even feared ad-skipping catalyst Tivo has gotten in on the new-form advertising act, now flashing ads on the TV screen when users pause, fast-forward, or delete programs. And if you haven’t noticed, the cable operators are packing in more ads on their video on demand menus and as pre-roll before VoD movies and shows.

I don’t think all of this has been completely thought through yet. While IPTV middleware companies are scrambling to get blood from the legacy set-top box stone with fancy new middleware and user interfaces, the HDTV vendors such as Sony are building their own user interfaces and guides as “wrappers” to the TV watching experience. Intertwined with all of this development is how to best serve up advertising. Will it be little button or banner ads lining the “window” of our TV screens, or scrolling across the bottom? Will it be baked into the content itself through “red button” apps or overlay technologies, with perhaps interactive ads that allow one to buy those shoes being worn by Jennifer Aniston or Tiger Woods’ new driver? Or will it be good ‘ole fashioned TV commercials delivered as 15-30 second spots in pre-roll form or ad breaks? Probably a combination of everything.

Which again begs the question: how is all of this advertising going to be received by consumers? What will their viewing experience be like? Will they know who to call when they have questions how to navigate a particular menu (the service provider or the TV manufacturer)? Will they be left hankering for simpler days when they had to adjust their rabbit ears? I would not go that far, but you can bet that the initial experience will be rough, especially since it will be a while before some combination of the TV vendors, STB companies, content houses, advertising software developers, remote control manufacturers, Pay TV service providers, and OTT video sites work through the kinks (though that process has started through a variety of IPTV and Internt TV standards bodies). Of course, there will be some simple ad schemes and revenue-generating applications that consumers will not have any problem with, but to serve up the full menu of what OTT video promises there is still a lot of work to be done.