Sensis Digital Media will create a new ad business by joining forces with the Telstra and BigPond classifieds in the Media Application and User Expreience Group (MAX). Starting July 1, the merged businesses will have access to more than 9 million consumers online and 10.5 million mobile customers each month.

Michael Padden, head of media classifieds for Telstra, will run the new venture. Padden will also work with Mark Shaw, the general manager of SDM, to integrate and grow business. The new division will control sales and innovation across online, mobile and IPTV. “We are aligning the teams from across Sensis and Telstra that are responsible for creating the digital advertising content with those responsible for selling it,” Padden said in an interview with The Australian.

Telecom analysts in the Australian market said the move was a long time coming, given the growth of BigPond as an advertising platform and the declining value of Sensis’ directory business. 

In a SDM press release, Shaw said, “This is an exciting move which will provide a strong opportunity for business growth and will result in a consolidated leadership position in the digital media industry.” Sensis first launched its digital advertising arm under the MediaSmart^®brand in 2002, before rebranding to Sensis Digital Media in 2010.

It is unclear from these announcements whether all Sensis online revenues will reside under the new SDM umbrella. For example, what happens to online Yellow and White revenues under the new arrangement? We will update this post once we have clarity on this point.

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Roku Channel Store

With cable subscriptions declining and a host of nonlinear, IP-connected devices emerging to offer new, incremental revenue possibilities, the time has come for local TV to get serious about an OTT strategy. To capitalize on this opportunity at a market level, local operators should be asking, “what does an effective OTT strategy entail?” and “what steps can be taken today?”

Roku, an OTT set-top box provider with an open application environment and channel store for content developers to build on, is probing these same questions and thinks it may have the answer. Partnerships, curated content, revised workflow and advertising are all part of the solution.

Roku’s channel store already features a growing swath of audio and video content, including Netflix, Hulu Plus, MLB.TV, the NHL, Pandora and Roku Newscaster, which culls together a cross-section of news from national outlets. While sports and entertainment/drama are particularly appealing, Jim Funk, Roku’s VP of business development, told BIA/Kelsey that customers of the channel store have demonstrated “lots of interest in local stations.”

Read the rest of this post.

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Two freshly released viewer surveys underscore the fragmentation of the TV marketplace, the surging demand for online video and time shifting, and the changing consumer attitudes toward traditional, live television. 

The most recent Morpace Omnibus study reveals that while 52 percent of viewing is live (linear broadcasting, whether prerecorded such as a TV series or movies, or actual live programming like sports and news), more than a third (36 percent) of viewing is now on-demand. In addition to VOD services, 41 percent of consumers use in-home or network DVRs for additional “on-demand,” non-linear viewing.

Meanwhile, the migration online continues, with results from an Altman Vilandria & Co. survey declaring that broadcast TV consumption on the Internet doubled over the past year.

Read the rest of the post here.

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Even though Hulu CEO Jason Kilar calls his service “incremental and complementary” to cable, the online video hub’s potential fall IPO is a testimony to the transition of TV across screens and the rapid growth of OTT (over-the-top) services.

OTT delivers IP video to end-users over third-party broadband using gaming consoles, set-top boxes, and other devices to connect the Internet and TV.  The upshot: the “cord is cut” on cable.  

BIA/Kelsey projects that OTT will surpass cable within three years, reaching 62 million homes by 2013 as consumers demand greater customization and control of their content.  Hulu is the most watched OTT service, with 53 percent of all OTT users accessing it.  Notably, 42 percent of those viewers already watch at least some Hulu programming on their TVs.

Read the rest of the post here.

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Some television networks, such as Turner Entertainment, are meanwhile starting to toy with the idea of adding contextual advertising to television programming. But so far this falls short of the potential we’ll see with IPTV and product placement.

TiVo and Amazon pushed this whole concept further yesterday. Building on an existing partnership, they will provide viewers with a “product purchase” option that will take users to an Amazon module where they can buy products seen in a given show (think books on “Oprah” or kitchen appliances in cooking shows).

This is all great, but it’s just one piece of the puzzle. Television shows, networks and advertisers will have to get on board to create a worthwhile amount of inventory so that some sort of “buy now” option is prompted at appropriate times. There will be interface issues too: Should a button pop up at contextually relevant times, or will it be more in the hands of the user to drill down to a separate menu to see what products are available from a given show (and how long are these options available after a program is viewed)?

Once this is all worked out, there will be lots of ways it can develop around local offline shopping. For certain types of products like electronics or home appliances, this is a great opportunity to provide promotions for local stores, or even inventory data and reserve features. Think of a national advertiser like Home Depot and the opportunity to drive offline power tool sales through product placement in home improvement shows.

There are lots of ways this could play out, but it could take a while before it reaches its true potential. TiVo is an appropriate company to get things moving, giving a growing installed base and the fact that it is helping to disintermediate the current push-based broadcast ad model. TiVo might accelerate the decline of the 30-second spot, in other words, but at least it has a(n arguably better) solution up its sleeve.

The post Product Placement Comes Closer Into Focus: Part III appeared first on BIA/Kelsey - Local Media Watch.

Two news items caught my eye today as they relate to our ongoing coverage of interactive product placement in various entertainment media.

First, Sony has announced a deal that will bring in-game ads to PlayStation 3 games. It will work with IGA worldwide, a New York-based outfit that specializes in video game product placement. Video game sales were way up last month, and engagement levels are relatively high and repetitive, signaling an opportunity for marketers that can integrate ads in a way that’s complimentary to game play. Microsoft is interested in this direction as part of its development of ad placement in online venues other than search.

Second, YouTube announced new capability to append various notes and pop-up messages within its videos. This will let video producers better tell stories and also provide context against which to index video for better searchability and ad placement. But for the purposes of this post, it gets closer to being able to integrate commercial messages within the videos themselves. The closest we’ve come to this is overlays and inline video ads — both experimented with by YouTube to somewhat unfavorable reception.

This ironically comes the day after YouTube’s “monetization chief” resigned. Meanwhile, Google chief Eric Schmidt has been speaking out about the need to better monetize the vast reaches of viral video throughout the network. Others have also speculated on YouTube’s current revenues (mostly home page ads) versus potential.

The interesting part is that the site had 4.4 billion video streams in March, according to comScore, accounting for 38 percent of the 11.5 billion overall online video streams. This means video streams surpassed the monthly searches done on core search engines (10.8 billion, according to comScore). These searches account for about 36 percent of the $24 billion U.S. online ad revenue pie (TKG Global Search Forecast), while total online video advertising is only $775 million (eMarketer).

The challenge, alluded to above, is finding an ad format that isn’t intrusive. Pre-roll is the prevalent format and has been met with resounding distaste, prompting development around less obtrusive formats. There are also quality inventory shortages in some cases. This underscores one of the benefits of merchant video that is served up in a local search context: There is no need for an accompanying ad because the video itself — while serving a user-centric purpose — is the ad.

The addressable inventory is meanwhile limited only by the millions of local listings out there, and local searches done (if you consider search engine distribution). These factors join many other benefits that will be explored in further depth very soon.

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Update: Steve Ballmer preaches to the Washington Post about about interactive product placement in the context of IPTV, among other things (without throwing anything). See video.

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We’ve already seen some models developed and speculated, but it has yet to really take off. In broadcast television, as shown in Nielsen’s figures, it’s mostly brand advertising so far. But with IPTV, there are implications for more interactivity that plays off products used in video programming.

In other words, we could see local directional advertising tied to products used in certain programs (think cooking, home improvement, fashion, etc.). It could take a while before IPTV providers work this into their service packages and hardware will be an issue (at the onset IPTV won’t look much different from cable). But the underlying architecture is there to build these types of ad delivery models.

We’ll also have IPTV providers with directory assets (AT&T), where the synergies between the two will only take a matter of time to be realized. Some of these integrations were hinted at by former Yellowpages.com president Charles Stubbs, and first signs can be seen in the Yellowpages.com channel on AT&T’s U-verse IPTV package.

In the meantime, the interactivity brought by IPTV will apply more to national brands. This could involve interactive options to find out more about products, or in some cases order them online. Like many other media, including the Web, the massive local opportunity will come later.

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This will enable lots of cool mashups and product placement opportunities that allow users to telescope in to learn where to buy products locally. One locally relevant scenario we’ve submitted in the past involves supplies or ingredients used in cooking or home improvement shows. Meanwhile we get a glimpse of some of the decidedly more fun features of IPTV, such as switching camera angles or sound feeds during sporting events.

But one big question mark in all this, explored in a TKG White Paper a while back, is hardware. Given all this great interactivity, will the bottleneck be hardware constraints? In other words, a traditional TV remote won’t do justice to all this functionality and to the way we’re accustomed to searching. Sure, browse functionality is possible using directional buttons, but we’re conditioned by search engines to utilize the full potential of typing queries at 62 words per minute, refining queries by quotes, geographic modifiers, and zeroing in with a mouse.

With a keyboard this is relatively seamless. But search on IPTV will require a new conditioning that is perhaps more reliant on browse functionality, given the presumption that we won’t immediately undergo a cultural shift that puts a keyboard and mouse on every living room coffee table in America. Or will we? This is definitely a dilemma, and perhaps a bottleneck to all the other technological issues on which the IPTV discussion seems to focus.

But we’re starting to see some hints at what could be developed. There are whispers of an Apple remote control to rule over the digital home, including iTunes music, movies, etc. Apple has been on a clear path to the living room over the past few years, including AppleTV which proved ahead of its time, like many other great products that were commercial failures. Netflix’s set-top box, launched this week, allows immediate access to its growing digital library, which could all but kill AppleTV. For now.

But when thinking of how this IPTV interface and hardware dilemma will be worked out, my money is on Apple to be the one to design something that is functionally sound and elegant enough to enter the living room. In true Apple form, it likely won’t be a mass market device at the onset at least, but neither will IPTV. This will be prime fodder for Apple in its ongoing transition to a digital media company. It is definitely thinking about this already, as it knows it’s in the best position to solve this issue, where a major potential market eventually exists.

I’m not really going out on a limb here by picking this horse, I know. But the point is, keep an eye on what the company develops in the coming months, with an eye toward possibilities for IPTV hardware. Clues can be found everywhere, even the iPhone.

The post Will Apple Rule Local Search in the Living Room? appeared first on BIA/Kelsey - Local Media Watch.

Two separate but related news items caught my eye today. First, Comcast has acquired social networking technology provider Plaxo in order to integrate social network-like features that let viewers share programming, among other things. Second, Turner Entertainment Networks announced a new plan to index content within television shows so contextually relevant ads can be served during subsequent commercial breaks.

Beyond holes in Turner’s plan that I’ll get into in a minute, these are moves that signal an interest among television providers to learn from what is working on the Internet. As Marc Andreessen asserted yesterday (see past post), television and other established media have to look to software to benefit from the innovation cycles that aren’t possible with their relatively fixed formats.

What Plaxo could do for Comcast involves more potential for growth than what will be possible at the onset. The idea is to integrate a system that taps the social and viral qualities of social networking to drive consumption of television content and ads. Plaxo already works with Comcast in some markets to provide software that ties together its triple-play products.

Future integrations based on this software will include things such as interfacing telephone calls and messages through the television. More value-added integrations are further off, such as greater pull-based content delivery and Web-like interaction with product search and communications. Here IPTV will have an architecture advantage over cable, but Comcast is moving in the right direction.

On to Turner, it’s likewise moving in the right direction, though its plan is to mashup contextual ad placements with traditional push-based 30-second ads, which kind of misses the point. In search, a great deal can be gleaned about intent from an isolated query. Television ads are much more passive. Just because I sat down to watch a particular movie, it doesn’t mean I’m interested in a specific product mentioned halfway through the film that may or may not have any thematic connection.

Contextual placement in other words is much more effective when intent can be determined, which is hardly the case here. This will improve with some of the aforementioned moves toward IPTV and its capability for behavioral targeting, product placement and “telescoping” items of interest for more information or purchase (think cooking shows and home improvement).

It’s good that TV execs are thinking differently, but it will take a few iterations and lots of other moving parts (user behavior, IPTV deployment, etc.) before they get it right.

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ExpertVillage (acquired by Demand Media last June)

VideoJug (received $30M last May)

HowCast (launched this month with $8M from Tudor Investment Corp.)

MonkeySee (launched last month)

5Min.com (received $5M from Spark Capital last month)

WonderHowTo.com (launched last month with undisclosed funding from General Catalyst Partners)

DIYNetwork (owned by Scripps)

Each is a variation on a model that involves providing thousands of how-to video — some amateur and some professional — in a number of categories. Most are ad supported, but many intend to have popular categories sponsored (JetBlue sponsors HowCast’s travel section). Additional distribution in some cases comes from YouTube and distribution deals with video networks such as Joost.

This format follows the growth in online video overall and is a natural offshoot that’s conducive to viral distribution. That is, it can be entertaining and informative. There is also a good opportunity, as pointed out in a past post, to utilize basic SEO tactics and make these videos surface in result pages for things people are searching for (i.e., “how do you fix a leaky faucet?”).

In fact, 2.6 percent of all searches are “how-to” in nature, according to Hitwise, and 5 percent of traffic from the top 10 how-to searches goes to video sites (mostly YouTube). Those top searches for the four weeks ended Jan. 26 are:

1. How to tie a tie
2. How to …
3. How to have sex
4. How to get pregnant
5. How to write a resume
6. How to win the lottery
7. How to kiss
8. How to lose weight fast
9. How to lose weight
10. How to solve a Rubik’s Cube

What About Local?

In addition to YouTube, how-to video distribution could also come from Internet Yellow Pages and local search sites, which have a clear interest in integrating video. This would involve local service providers that wish to advertise via instructional video — joining the formats they currently use (care of video producers such as TurnHere). For IYPs, the opportunity here would stem from using the aforementioned video SEO tactics to gain traffic from all these how-to searches.

It also seems this format could thrive in the IPTV environment and become almost a form of “advertorial” content that could replace traditional television advertising in some verticals, such as home and garden. Thirty-second spots will in fact be less relevant in the “on demand’ environment of IPTV, and there will be some creativity required to come up with alternatives, such as product placement or instructional video.

For instance, picture an instructional video on tiling your bathroom sponsored by Home Depot and followed by an interactive menu of supplies used. This could come with the ability to purchase or reserve items for in-store pickup. All this will be possible with the interactive capabilities of IPTV (defined here), while IP-based targeting can send or suggest behaviorally relevant content on an ongoing basis.

(A foundation for this scenario can already be seen in the local search “channel” AT&T provides with its U-verse IPTV package — see firsthand look from Peter Krasilovsky.)

IPTV is a long way from reaching mainstream penetration and more developed advertising models that leverage this IP-based delivery. But it’s not too early to begin pondering these possibilities and what they mean for local advertising as we know it. In the meantime, production of video ads — both how-to and more traditional formats — can get a head start as a growing form of online SMB advertising.

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Update: In response to this post, TurnHere’s blog demonstates a how-to video they shot.

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