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Cable company rolls out on-demand advertising: Comcast already has signed deal with General Motors

November 6, 2006

People don't typically pay for on-demand cable so that they can look at advertisements, but Comcast thinks they will. It's trying to turn an old axiom-that people avoid advertising like the plague-on its ear.

The Philadelphia-based company that provides cable television in much of Marion County thinks its new on-demand advertising-launched earlier this fall-will be so popular, viewers will seek out the pitches.

For Comcast digital cable subscribers, accessing on-demand ads is as easy as going to their video on-demand menu and clicking the icon for SearchLight-Comcast's advertising ondemand brand name. Once there, viewers see links to various ads organized by product and service type.

Locally, Bright House Networks and Insight Cablevision are also considering rolling out on-demand advertising. So why do Comcast and other cable firms think consumers will seek out these ads?

Because, they say, viewers want detailed information on products, services and even community issues that they can't get from shorter, less descriptive, traditional ads. Plus, many on-demand ads will have an entertainment component to lure viewers.

Digital cable subscribers pay $10 to $15 on top of their monthly cable bill in part for on-demand, which allows them to view a menu of shows whenever they want. Viewers access the programming through an on-screen menu. They can then pause, resume and rewind the program.

Comcast officials said they're already having great success applying the same format to advertising in markets such as Philadelphia and Chicago. The medium has been popular with automobile manufacturers, health care providers, tourism companies and even politicians.

"We think this has enormous potential," said Mark Apple, Comcast area director of corporate affairs.

Advertising experts agree.

"This method brings a search engine technique to television," said Ray Begovich, a Franklin College journalism professor who teaches advertising and sales. "I think this is another tool for advertisers, and with a powerful medium like TV behind it, it should be a valuable tool."

Based on feedback from meetings with advertising agencies late last summer, clients will be receptive, said Phil Paligraf, vice president of Spotlight Indianapolis. Spotlight, which has a name similar to Comcast's on-demand ad platform, is a cooperative the region's three cable systems set up to give clients an easy way to place ads on all the systems.

On-demand advertising allows longer than standard 30-second TV spots, giving advertisers an opportunity to advertise multiple products. General Motors, for instance, has separate two-to-four-minute ads for Cadillac, Hummer, Pontiac and other brands. Some ads are even longer, taking on a documentary format.

The longer format, Paligraf said, allows advertisers to be more creative. On-demand also allows advertisers to reach "consumers who want to be engaged," and to track exactly how often their advertisements are viewed.

"Creative people in advertising agencies should be salivating over this," Begovich said.

He envisions many of the campaigns being coupled with Internet, billboard, print and other mainstream advertising campaigns. Comcast's Apple said that is already happening.

Advertisers are using their mainstream marketing campaigns to push viewers to their on-demand ads. General Motors, for instance, has launched a campaign in which traditional ads refer people to SearchLight for more information on new vehicles.

While there aren't many local companies taking of on-demand advertising, advantage interest is high, said Terri Reilly, president of EchoPoint, the media planning and buying arm of Indianapolis advertising agency Young & Laramore.

"This is something that makes a lot of sense," Reilly said. "But there has to be an incentive or reason to get people to seek out these commercials, so we have to be more creative."

Advertising agency officials have concerns about pricing and tracking viewer demographics. Comcast officials wouldn't discuss on-demand advertising pricing other than to say it is negotiable.

"There are a lot of different forms ondemand advertising can take," Paligraf said. "Pricing will depend on the structure of the ad."

It could also be based on the number of views per ad. That number will depend not only on the appeal of the ads themselves, but also on how many people pay for digital cable. Comcast says it has nearly 82,000 digital cable subscribers and that the number is growing about 5 percent monthly.

Spotlight officials are so confident in on-demand advertising, they plan to add up to six staffers in the next year to handle the influx of business, Paligraf said.

Advertising experts said on-demand advertising will be a multimillion-dollar revenue generator for Comcast's local operation within a few years. Though Apple declined to discuss Comcast's local revenue, he said the new form of advertising should prove "very significant."

"If this is done right, it will be the next big wave in advertising," said Bob Gustafson, a Ball State University advertising professor. "There are a lot of people now who like engagement with the medium, and that will become more predominant with the coming generations."
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