advertising revenue opportunities - cisco · •suburban mind-sets •terraced melting pot •upper...

Cisco Video Summit '14

Advertising Revenue Opportunities

David Whittaker

Business Development Manger - Cisco

June 20, 2014

For service providers

2 Cisco Video Summit '14 © 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

Topics

Why should you be interested in advertising – where is the money for a Service Provider?

How can SPs enable these revenue flows?

Case studies on advertising revenues in existing Cisco customers

Advanced and addressable advertising

What are we offering?

How to do you access advertising money?

Q & A


TV advertising business

Audience Inventory Advertiser demand Money

TV viewers

Creditably measured

Demographically subdivided

SPs deliver audience for broadcasters and

content providers

Advertising time available in a show

or on a channel

Who owns / sells this inventory?

Will they pay for their adverts to been seen

your audience?

The right Ads seen by the right viewers

at the right time


Advertising – where is the money for a Service Provider?

All provide additional revenue or reduction of existing costs

• Direct revenue from ad sales of own inventory

• Ad sales revenue in the context of channel

carriage deals

• Indirect share of ad sales revenue proportional

to audience delivered / enabled by SP

• Ad sales revenue in the context of On-demand

content supply and viewing


Direct revenue from ad sales of own inventory

Significant income for some SPs, zero income for others

• Ads on channels you create or channels where you

populate and sell the Ad breaks

• Requires dedicated Airtime Sales team and Ad

trafficking and play out operations

• Ads and sponsorship deals

• Regional / local market Ad sales


Ad revenue in the context of channel carriage deals

Larger Ad revenues moderate Pay-TV channel subscription revenue share in carriage deals

• A channel’s own Ad sales revenues are proportionate

to the volume of viewers who have access to and

watch the channel

• SP carriage deals provide this audience

• Larger audiences provide increased Ad revenues for

a channel

• This benefit can impact SP channel fees and carriage

deal negotiations / renewals


Indirect share of Ad sales revenue proportional to audience delivered / enabled by SP

Cooperation to generate and share additional Ad revenues

• SPs can enable channels to generate additional Ad

revenues

• +1 Channel carriage capacity and EPG listings

• Targeted Ad delivery using SP audience data and

segmentation (Geographic / demographic)

• SPs claim share of the additional Ad revenue made

by the channel


Ad sales revenue in the context of On-demand content supply and viewing

The key issue is money – not “rights”

• SPs want to provide top channel TV catch-up / On

demand to thier subscribers

• TV channels want additional income proportional to

this type of additional viewing of their content

• Ad revenue benefit of this viewing will accelerate

supply agreements and moderate SP costs

• Appropriate measurement is key


Case Study - Comcast (US)

Comcast cable Advertising revenues

$2.287 Billion (5.7% of total revenues)

Local avail inventory sales / trading

Comcast Spotlight

Advertising sales house – Linear, VOD, EPG

Reaching 30M cable subscribers


Case Study - DirecTV (US)

DTH “Local avail” inventory sales

(Revenues not reported)

Viewing data sales and Nielsen cost

Next step is Addressable Advertising

“Launch Addressable and Local Advertising. Our advertising revenue per subscriber

trails many of our competitors. This is because, unlike the cable industry, we have not

had the ability to target advertising at the local level due to the nature of our national

satellite infrastructure. Using new technology, we now have the capability to insert

advertising into individual DVRs to enable advertisers to target customers in local

regions and eventually in the individual home. With this new technology, we expect

to significantly increase our advertising revenues over the coming years”

DIRECTV’s Addressable platform is now available

nationally on 46 networks in over 11MM HHs

http://directvadsales.com/addressable-faqs/





http://www.directvadsales.com/Default.aspx


Case Study – BSkyB (UK) TV advertising sales revenues

£440 million (6.5% of total revenues)

“Sky” brand channel inventory

And 3rd party channel Ad sales (127 Channels)

Carriage deal cost changes

1998 – Sky pay channels / 2008 - Channels pay Sky / Now - complex deals

Technical Platform Service charges

£10-30 million (regional targeting, book from promo, and other services)

On-Demand content supply agreements and costs

Channel 4 / ITV – OD content and data exchange

SkyView – Sky AdSmart – SkyGo

http://www.skymedia.co.uk/index.aspx

http://www.skymedia.co.uk/Audience-Insight/skyview.aspx


Sky AdSmart

In home DVR based Ad substitution

Live and time-shifted viewing

Cisco technologies used …

Headend encoder control, substitution rules management, playout and

Advertising sales integration

DVR substitution control, video player management, reporting and metrics,

security

Sky CEO Jeremy Darroch “Our targeted advertising service, Sky AdSmart,

is attracting many new advertisers to Sky.”

Takes advantage of …

Installed base of DVRs (6.5M+ AdSmart capable)

Existing £440M Airtime sales business (SkyMedia)

Existing measurement and metrics


Sky AdSmart

Proposition to Advertisers – Video

http://www.skymedia.co.uk/_downloads/1842/Sky%20Ad

Smart%20Explainer%20Video_FINAL_06_03_14.mp4

http://www.skymedia.co.uk/_downloads/1842/Sky AdSmart Explainer Video_FINAL_06_03_14.mp4

http://www.skymedia.co.uk/_downloads/1842/Sky AdSmart Explainer Video_FINAL_06_03_14.mp4

© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 14 Cisco Video Summit '14

BSkyB Audience Segmentation

• Active Retirement • Alpha Territory • Careers and Kids • Claimant Cultures • Elderly Needs • Ex-Council Community • Industrial Heritage • Liberal Opinions • New Homemakers • Professional Rewards • Rural Solitude • Small Town Diversity • Suburban Mind-sets • Terraced Melting Pot • Upper Floor Living

• Accumulated Wealth • Balancing Budgets • Bright Futures • Consolidating Assets • Established Reserves • Family Interest • Growing Rewards • Platinum Pensions • Seasoned Economy • Single Endeavours • Stretched Finances • Sunset Security • Traditional Thrift • Young Essentials

• Home Owner • Non Home Owner

• Very High • High • Mid High • Mid • Low • Very Low

• Elderly Family • Elderly Homesharers • Elderly Single • Older Family • Older Homesharers • Older Single • Mature Family • Mature Homesharers • Mature Singles • Young Family • Young Homesharers • Young Single • Very Young Family • Very Young Homesharers • Very Young Single

• Pre School age 0-4 • Primary School age 5-11 • Secondary School age 12-17

• Belfast • Brimingham • Brighton/Wothing/Littlehampton

• Bristol • Cardiff & South Wales Valley • Edinburgh • Glasgow • Leeds-Bradford • Leicester • Liverpool/Birkenhead • Manchester • Newcastle-Sunderland • Nottingham-Derby • Portsmouth/Southampton • Sheffield

• Northern Scotland • Central Scotland • Border-Scotland • Border-England • Channel Islands • East-of-England • HTV Wales • HTV West • London • Meridian • Midlands • North-East • North-West • South-West • Ulster • Yorkshire

Household Composition

Lifestage Metropolitan Area

Region

Home Ownership

Financial Strategy Mosaic Lifestyle

Affluence

• All men in HH are 16-24

• Youngest Male is 16-34 • Youngest Male is 35-44 • Youngest Male is 45-54 • Youngest Male is 55+

• Men only HH

• All women in HH are 16-24

• Youngest Female is 16-34 • Youngest Female is 35-44 • Youngest Female is 45-54 • Youngest Female is 55+

• Women only HH


BSkyB and Cisco Joint Innovation

360 degree understanding of business objectives and revenue goals

Ad sales, platform technology, regulation, measurement, trading, 3rd party channel relationships

Total Addressable market of US$11bn

AdSmart now active in 6.5M+ UK households


Initial results

Business Results

Delivered 165 million targeted ads and 700 campaigns

Used by more than 100 advertisers

Increased sales and brand retention for advertiser customers

Improved SkyMedia business and revenue - 50% of advertisers were new to Sky, some were new

to TV

Significant additional revenue for Sky Media

http://www.skymedia.co.uk/news/sky-adsmart-celebrates-its-100th-advertiser.aspx














Case Study - STAR TV (India)

Ad sales revenues compared with subscriber fees

Ad sales approximately 55% of overall revenues

Previously, all channels deliver same national feeds to all regions

and viewers

Local market substitution and language support

Significant opportunity to expand demand and revenue for local market

advertisers and local market language versions of national ads

Significant, existing local market spend on other forms of media

Local market cable headend substitution deployment now planned

Now using Cisco AdSmart to provide targeted delivery of

#1 Indian market channel –Star Plus.


On-demand / TV catch up Advertising revenue opportunities and challenges


Core monetization strategy for OTT

Additonal viewing measured and reported as TV viewing and Ads can be traded as an extension of broadcast TV and DVR viewing

Addressable advertising can bring in further revenue

Why is Advertising Important?


How can SPs enable these revenue flows?

Delivering SP connected TV audiences

Delivering Ad Impacts to these SP audiences

Subscriber agreements and household profiles

Subscriber viewing data collection agreements

Scale and Addressable technologies

Understand and cooperate with channel business ad revenues

Avoiding business conflict

$

$

$ $


Our Approach

Protect and sustain linear ad revenue

“Linear Parity”: TV ads must accompany content proliferation to new devices

Audience delivery and measurement across all viewing platforms

First:

Do no harm

New ad formats

Precision audience targeting (higher value inventory)

Dynamic decisioning and delivery

Improved measurement and analytics

Then:

Generate enhanced value via

capabilities of IP network


Data and Analytics


AMS — Audience Measurement System

An end-to-end system that monitors and logs a wide variety of CPE activities related to the whole TV viewing experience:

- Live viewing; Recording; Playback; User interface; VOD download and playback; Interactive applications; System messages

AMS reports the information to external analytics/ BI applications

AMS data gathering being incorporated into Cloud Data and Analytics service

iOS and Android devices now being measured

Provides data for multiple TV measurements organizations including Neilsen, BARB, AGF, etc


Cloud scalable data ingest & simplified integration

Scheduled/triggered bulk ingest of time series data via bulk ingest tool/agent

Pentaho BI tool will provide pre-built reports & dashboards aimed at key business areas

Bespoke integration with further datasets can be discussed

TV Analytics — Minimum Feature Set


Q & A


Conclusion – How to do you access advertising money?

Talk to Cisco

We have understandings, experience and solutions to share with you

Understand and enhance advertising revenue flows

Sold by you

Influence your colleagues and partners

Sold by your content partners

To recognize the additional revenue opportunities

To add them to your bottom line

Thank you.

http://www.cisco.com/c/en/us/solutions/service-provider/videoscape-unity/index.htm

[email protected]







mailto:[email protected]?subject=Cisco Advertising revenue for SPs - Video Summit 2104


BSkyB AdSmart Campaign case study


Use Case — Automotive

Worked closely with Auto dealership in selected UK regions

Identified and defined a make and model

Promotion on TV only for 6 weeks

Demographic targeting as well as regional

Campaign saw a sales uplift of 100%

Campaign took marketing budget from other local media sources

Also working with Audi & others


Summary

A proven track record in delivering addressable advertising solutions

Cisco provides multi-screen advertising capability across all devices and services

A commitment to delivering scalable, cloud based solutions and in working in mixed cloud/on-premises models

Industry leading partnerships to extend both the width and the depth of our solutions

An understanding of the wider multi-screen delivery ecosystem

Multi-screen Proven Ecosystem Cloud Partnerships

advertising revenue opportunities - cisco · •suburban mind-sets •terraced melting pot •upper...

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