Multi Screen Advertising - Replacement Ads the immediate opportunity!!

Summary 
Local ads for Linear TV delivered to MSV devices is a financial opportunity for many cable/telco/ott content distributors. There are a number of reasons that are offered as to why to not replace MSV ads.This blog goes through these reasons and shows how many of them are no longer relevant.


Many traditional content distributors are now able to deliver their traditional television feeds to Multi Screen Video devices such as tablets, iphones, android devices as well as to the web.
 The rationale for this retransmission has been to:
1. Retain consumers
2. Stay competitive with other content distributors and new entrants
3. Show thought leadership

Although these are excellent reasons for re-transmitting linear tv signals to MSV devices there is a significant revenue opportunity that is yet to be realized. Basically replace/insert the local advertisements in the linear TV stream for MSV devices in the same manner that they are being inserted by most of the content distributors in each region for traditional TV.

Most cable operators and telcos that are transmitting linear television signals have the right to replace the ads in their local markets. This is only two minutes of every hour (content is typically 42 minutes. The remainder are national ads), however this is a very significant revenue stream (500 channels, 24 hours in a day, 8 hours of TV viewing per day in the US per person.....adds up to a lot of ads!!).
 
So it makes a lot of sense (and potentially a fair amount of money) to replace the local ads that are going out to the MSV devices. Why is this not already being done?
There are a number of different rationales for this. Below I am going to have a conversation with myself (I am told that this is the first sign of insanity but it's for a good cause :) )and say what the rationale is for not doing ad replacement and then answer why the point may no longer be relevant.

1. No one is watching TV on their mobile, web and/or tablet device. 

1. There is a lot of data that shows that video content viewing is on the rise across the board on non TV devices
1. The following was announced this week-> Engadget : Time warner cable brings 26 channels to IOS app
2. And not just in the US Linear dominates Multiscreen TV at Stofa and Belgacon  sky-go-brings-live-streaming-to-uk-customers
2. Net net people have started to watch video on all their devices and TV Everywhere seems to be the new reality. Not everyone. Not all the time. But it is increasing and most content distributors are already deploying solutions.

2.Ok people are watching video. But its all YouTube  

1. Yes, it's true that a lot of it is YouTube. Here's a ComScore report from January where overall numbers are increasing and YouTube is the largest component. TechCrunch->comscore-long-form-video-content-views-on-the-rise-in-january
2. However, YouTube is itself starting to create premium content( $100 Million investment).
3. Netflix is doing the same thing.
4. Hulu is quite popular and is doing retransmission of content and a different ad payload.
5. Most content distributors are already retransmitting linear feeds....so the point is kind of moot.
6. There is growing demand for premium content on MSV devices. The question is who is going to fulfill the demand? And how are they going to monetize it?

3. We are going to lose viewers from traditional TV

1. It is not clear that this is true. A number of studies have been carried out that show that MSV distribution can actually be complementary as it can expose an ad to a demographic that may not see the ad on traditional TV as well as providing reinforcement of the ad on different screens.
2. Somebody else is going to provide the content to the viewers over an MSV medium and the consumers will watch content where they want to. There are certainly an increasing number of options as listed in the last few points.

4.  It can't be done.

1.  Technical solution that offer ad replacement on MSV platforms are now becoming available. Oddly enough I might know about one( look what my day time job is!)

5. It is not worth the effort( business case).

1. Seeing as viewing hours are up on non TV devices, a clear break-even or payback threshold can easily be calculated. This is done in the traditional linear local ad insertion business all the time 
2. Here's an article that indicates that advertisers are getting ready to spend more money on mobile video advertising Adotas->Emarketer report : 65% on mobile and 40% on video advertisers will spend more this years

6.It's operationally tough to do.

1. Typical content distributors have different groups focused on ad replacement systems and on MSV transmission of linear feeds( the web or mobile group). These groups have not had to interact till now. The business case will drive the implementation.

7. We can't sell these ads.

1. The ad sale in this case is very similar to the ad sale that is done for traditional local ad insertion. Traditional sales channels for local spots can with little change to the workflow offer these new zones as either a complementary sale or a brand new sale.
2. Basically this should be an easy area for traditional sales groups to sell the new MSV ads

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