On-Demand and Mobile Device Video to Offer Up to $22 Billion in US Pay-TV Advertising

Oyster Bay, New York - 05 Jan 2012

​Customers’ adoption of new viewing formats, including VOD and viewing on media tablets and smartphones, will cause up to $22 billion (30%) of the US pay-TV advertising market to shift to new formats by 2016.  Western Europe will see similar shifts, while the rest of world will lag in its transition of advertising dollars to new formats.

“A shift is already underway in the television advertising marketplace from linear ads inserted by a 24-hour schedule to advanced technologies that will increase the effectiveness of advertisers’ spending,” says Sam Rosen, senior analyst, digital home.  New technologies are achieving scale within broadcasters’ advertising systems, notably audience measurement and tracking, targeted advertising, interactive advertising, VOD and multiscreen advertising, and other techniques, including companion devices.

Many of the companies leading the charge in the advanced advertising ecosystem are yet to become household names, rather they are specialists as new ad formats develop, including: Canoe Ventures (interactive ads), BlackArrow (VOD ads), This Technology (dynamic ad platform), INVIDI, and Visible World (targeted or addressable ads).

Numerous technology components are required to deliver new ad formats.  The vendor ecosystem will rapidly expand to addresses these opportunities, including:

•    Advertising-specific hardware and software systems, such as ad servers, ad splicers, ad decision systems, and traffic and billing systems

•    Advertising-specific components of set-top box middleware, such as measurement and reporting tools, interactive stacks, and interactive applications

•    Advertising-specific VOD software

ABI Research’s new study, “Advanced Advertising Technologies for Pay-TV Platforms,” discusses advertising technology used in television, Internet and over-the-top (OTT) video platforms, traditional linear TV, catch-up TV, DVR/PVR storage, and VOD platforms.  It covers interactive platforms, interactive advertising formats, and advanced advertising technologies.

It is part of ABI Research’s TV and Video Research Service.

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