Watchwith aims to help TV advertising evolve for the digital era

Say what you will about commercials, but TV video ads managed to generate upwards of $173 billion last year. The problem is, there are fewer pairs of eyeballs to watch traditional linear television these days thanks to a multitude of options to view instead on tablets, smartphones, and set-top box apps. Combine that with the rising preference for OTT (over the top) content, and TV programmers now have a growing conundrum on their hands — how do you keep generating advertising dollars as viewing habits become more fragmented and TV commercials lose effectiveness?
That’s an issue media startup Watchwith wants to do something about. The company came on the scene in 2013 with the launch of a platform allowing TV programmers to insert engaging, second-screen content while the show is playing, (sort of like a Pop Up Video). It uses meta data, information about the audience itself, and a few other sources to do this — either baking the integration directly into mobile app platforms or utilizing the ACR (automatic content recognition) capabilities of smart TVs to trigger perfectly timed engaging content regardless of where a program is being watched (cable, broadcast, on-demand via an app). Today Watchwith announced that it’s translating its technology for advertising, and has already forged many partnerships including CBSi, FOX Broadcasting, NBCUniversal, and Viacom.
More specifically, Watchwith is now giving TV programmers the ability to insert interactive ad spots while a show is playing. The ads themselves will take up a portion of the screen (I’m guessing either bottom corners or a banner across the bottom), and likely be similar to those animated promos TV networks use when watching linear broadcast/cable TV.
This is significant because it creates an opportunity for new forms of ads to be sold that are specific and unique to each moment of a program. And when you introduce audience data, you can get a much more relevant ad targeted at the right people. That’s the idea, anyway.
“What we’ve built is the perfect intersection between data and creativity [in TV advertising] that people have been talking about,” said Watchwith CEO Zane Vella in an interview with Gigaom, adding that the capability to insert contextually relevant in-program ads (perhaps not at scale, though) has been possible for years with the available technology. But, he explained, it took the TV industry a while to catch up.

A WatchWith ad pops on screen at a specific moment during Bravo's Best New Restaurant reality show.

A Watchwith ad pops on screen at a specific moment during Bravo’s Best New Restaurant reality show.

Watchwith ads can prompt viewers with a question, poll, or factoid related to a specific moment during a program, while featuring an advertiser’s logo. In this sense, the company (as well as many TV networks) are betting that people are far more accepting of these types of ad spots than the typical commercial break that lasts several minutes. I’m inclined to agree, especially with Hulu — the premiere ad-supported premium TV service — recently deciding to give its customers the option of paying more to eliminate commercials.
Vella explained that the TV industry landscape is much different now compared to even five years ago — in that programmers now have more sophisticated digital ad strategies as well as ad technologies at their disposal. That means they aren’t tied to the traditional practice of matching advertising based solely on the content of the show or the audience demographics — and hoping it has the desired affect of giving advertisers a ROI.
Watchwith essentially gives programmers the ability manage their advertising efforts directly, handling both sales and the delivery of those ads without involving a middle man. Of course when that doesn’t make sense, Watchwith ads can also be automated to run programmatic network ads. However, the main benefit remains that programmers have more control.
“We’re at a very interesting time in television, especially with Tim Cook’s recent proclamation that the future of television is apps,” Vella said. The Apple TV CEO’s statement was made in reference to the company’s new tvOS, a brand new operating system that will finally allow third-party developers to build apps for the company’s Apple TV set-top box.
If Cook’s prediction does hold true, then it puts Watchwith at the forefront. With more TV-specific apps being created for people to consume content, TV programmers and advertisers alike will be faced with an even more fragmented ecosystem — meaning, it’ll be harder to target the same audience across multiple platforms.

Note to Advertisers: TV Viewers Aren’t Actually Watching

More than 60 percent of all viewers watching TV are distracted by data applications on mobile devices, while 33 percent are watching TV with their laptops open, according to a new study. Just 6 percent of TV viewers watch the tube with no distractions at all.

Comcast Using BlackArrow’s Ad Insertion Tech for VOD

BlackArrow announced today that its targeted TV ad platform is now live on Comcast’s (s CMCSA) On Demand programming in Jacksonville, Fla.. This is BlackArrow’s first market implementation with a major MSO.

Typically, ads inserted into operator VOD programming are stitched into the content itself, which limits the flexibility of the ad placement. According to BlackArrow CEO Dean Denhart, usually it takes 60 to 90 days to get a video ad into a piece of VOD content. Denhart said that using BlackArrow’s system, cable operators like Comcast can dynamically change up the ads served in real-time to deliver more relevant ads. BlackArrow allows operators to target ads based on demographics, genre, time of day or any number of different factors.

The company says it can deliver this level of targeting because its system lives in the network, with no software on the set-top box. BlackArrow sits with the regional operating centers before the content reaches the consumer, so targeted ads can be inserted into the videos before they are delivered to the end user. Comcast will use BlackArrow’s technology to insert 15-, 20- and 30-second promotional spots designed to drive tune-in for upcoming shows and specials on PBS KIDS Sprout and FEARnet.

BlackArrow is four years old and has raised $38 million in funding from investors including Comcast Interactive Capital, Cisco Systems and Intel Capital. Other players in the addressable TV advertising space include Canoe Ventures (which Denhart sees as more of a partner), Microsoft (s MSFT) and Google (s GOOG) TV Ads.

Congress Tackles Loud Commercials

Health care shmealth care — government is finally working to solve a problem we can all get behind: loud commercials. The House Communications Subcommittee has approved a bill that would require broadcasters and operators (including satellite and cable) to normalize the volume of TV advertisements.

Broadcasting & Cable writes that the Commercial Advertisement Loudness Mitigation (CALM) is backed by Rep. Anna Eshoo (D-Calif.):

Eshoo said the bill premise was simple: “To make the volume of commercials and programming uniform so that spikes in volume do not affect the consumer’s ability to control sound.” Eshoo said that ad volume spikes had “endangered hearing for decades.” She also said legislative spouses had been urging their husbands or wives to sign on as co-sponsors. “I think they are all tired of getting blasted out of their easy chairs or off their exercise equipment due to these ridiculously loud commercials.”

After the fast-forward button (to zap through the commercials entirely), “mute” is the second most used button on the Albrecht remote. I’m not sure why advertisers think that YELLING at us will make us like their product, but hopefully this bill will pass and the TV will quiet down.

It looks like the bill only addresses oldteevee, which is too bad because we’ve noticed that newteevee sites definitely fiddle with the ad volume as well.

NBC Enters Into Targeted TV Ad Pact with Microsoft

NBC (s GE) announced a deal with Microsoft (s MSFT) today to implement technology that will make selling broadcast and cable TV commercial time more akin to selling online ads, The Wall Street Journal reports. This is the second such ad deal for the NBC, which also has an agreement with Google (s GOOG). But the battle to bring targeted ads to TV is just warming up, and other heavyweights are ready to jump in.

The NBC/Microsoft deal will use technology from Navic Networks, which Microsoft acquired last year, to analyze set-top box data from multiservice operators as well as other data such as consumer purchasing habits and location. Using this information, Microsoft will be able to look at where an advertiser currently places ads, make recommendations for other shows that would reach similar audiences and sell the ad time on those recommended programs.

Read More about NBC Enters Into Targeted TV Ad Pact with Microsoft