Summary Findings to Date of the

Advanced Advertising Media Project

aamp

and the Consumer Advertising Experience

VIDEO-ON-DEMAND

The Advanced Advertising Media Project (AAMP) is an industry-wide

research initiative that brings together media industry stakeholders to

test, measure and analyze the effectiveness of advertising within free

video-on-demand (VOD) television programming.

AAMP leverages the collective knowledge and expertise of agencies,

advertisers, programmers and cable operators to shape dynamic

advertising strategies and measurement that can help the industry to

accelerate the monetization of VOD content.

http://aamp.blackarrow.tv

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aamp

AAMP MISSION AND MEMBERS

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Fi n d i n g s S u m m a ry

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KEY FINDINGS

VOD is fundamentally a television experience, but with

heightened attention and engagement compared to linear TV.

Consumers accept advertising on VOD. Today’s consumers

expect to see advertising on TV and related platforms, and its

presence on VOD is neither a surprise nor a barrier to enjoy-

ment.

Ad load on VOD does not affect key measures, such as viewer

enjoyment of the show, engagement with the advertising,

brand recall, interest, and purchase intent. VOD ads are

equally effective and viewer engagement is equally strong

across light, moderate and heavy (linear-style) ad loads.

VOD creates opportunities for different ad formats. VOD

offers a more engaging platform than linear TV. Consumers

respond positively to longer-form, branded content (and poten-

tially other ad formats) that recognize their heightened level of

attention and engagement.

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A A M P I n i t i at i v e S u m m a ry

MARKET TRENDS

With time-shifted television viewing accelerating at an annual growth

rate of 17.9 percent*, consumers are clearly expressing their viewing

preferences. In parallel, this rate of change has prompted agencies,

advertisers, programmers and cable providers to rethink historic

advertising strategies and models.

This continuing evolution of television viewing behavior was a driving

factor behind the creation of the Advanced Advertising Media Project

(AAMP) - an industry-wide research initiative to quantify the impact

of advertising within on-demand television environments. AAMP

harnesses the collective expertise of key advertising stakeholders to

maintain the integrity of the consumer viewing experience and to

accelerate the monetization of VOD content.

* Nielsen State of the Media TV report, March 2011

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A A M P I n i t i at i v e S u m m a ry ( c o n t. )

Research Overview

AAMP is a three-phased industry initiative designed to systematically test, reveal and apply the findings of each stage

to inform the next, in order to create a progressive body of learning.

Summary Findings, In Context

This AAMP report starts with a foundation of highlights from the Media Insights study, which set the stage for

the VOD Consumer Video Lab. The lab component, completed in September 2011, revealed new insight on

consumers’ perceptions of advertising in VOD television environments. These findings are being disclosed

publicly for the first time as part of this report.

THE THREE PHASES OF AAMP

Media Industry Insights qualitative analysis

In-depth study establishing a baseline understanding of current industry

perceptions of the challenges, opportunities and expectations for

advertising on free VOD (status: completed)

VOD Consumer Video Labquantitative analysis

Laboratory consumer research to explore and measure viewers’ experi-

ences when engaging with advertising in simulated VOD and linear TV

environments (status: completed)

Live Testmarket trial

In-market test using insight and data gathered in the first two phases as

a basis for a practical, live consumer trial of VOD advertising

(status: 2012)

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I n R e v i e w : To p - l i n e F i n d i n g s f r o m A A M P P h a s e I

There remains a deeply held belief that major

growth for VOD lies ahead.

“It is way too hard [to sell and manage VOD advertising]. But, we believe in it as a medium. It is funny, my team will moan and complain about it, but nobody wants to give it back to the television team, because we still believe it is the future.”

�- ad sales executive, programmer

VOD affords an opportunity for advertisers to forge a

closer relationship with consumers in a highly engag-

ing, focused viewing environment.

“VOD offers the consumer the ability to manipulate time, content and access, in ways I don’t get to do in linear TV…Now we are talking about not CPM or impressions, but going further into the relationship-building process with the consumer.”

�- senior marketing executive

Metrics that approach established measurement

tools already in use within the industry were

identified as critical to helping advertisers under-

stand the value of on-demand placements.

“If you can use existing metrics that everybody sort of accepts, but use them in a way that helps us understand and demonstrate what we want to show, I think you are better off. Any metric we have is always, in some way, a proxy for a real gain: ‘Did we sell more Coca-Cola today?’”

�- research executive, programmer

Full-scale research is required to gauge consumer

awareness and usage of VOD, as well as reactions to

advertising in a VOD context – where little visibility

exists today.

“I really want to understand how the consumer makes a distinction between linear TV, VOD and their DVR. Is there any distinction? What is it that VOD would give them that they are not getting now?”

�- research director, TV network

Media Insights: Key Themes Among Industry Stakeholders

Findings

During the initial Media Insights survey phase, researchers conducted more than 20 in-depth interviews with

senior media executives to gauge industry perceptions and opportunities related to dynamic VOD advertising.

The exhaustive survey covered such topics as the current perceptions of TV; the future of advanced TV; barriers

to advertising adoption within VOD; and the prioritization of requirements of VOD advertising.

Key findings are summarized below; a more detailed version of the report can be downloaded from

http://aamp.blackarrow.tv

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A A M P P h a s e I I M e t h o d o lo g y

Phase II of AAMP represents one of the most

comprehensive market research studies ever undertaken

on VOD. More than 1,000 consumers – all likely targets

for VOD – watched 30 minutes of television in a highly

realistic context within sophisticated media labs in New

York City and Los Angeles. A custom-built VOD

platform offered a choice of 19 television shows across

the comedy, drama and reality genres from 11 networks.

Aspects of the viewing experience were systematically

varied across respondents, creating an experimental

design that pinpointed the effects of:

Three main types of data were collected:

The design of the Phase II research is summarized on

the following page.

Platform (linear versus VOD)

Fast-forward functionality (enabled versus

disabled)

Ad format (spots versus longer form, branded

content)

Ad load (light, moderate or heavy, defined as 3,

5.5 or 8* minutes of ads per 30 minutes of

viewing time, respectively)

AAMP Phase I I : Study Design

Dial test data

Collected second-by-second reactions using a

custom-built dial application on a touchscreen

phone given to each respondent, synched to a

VOD set-top box to log files for analysis

Survey data

Collected immediately after the respondent

finished watching the show, with core metrics

such as viewer enjoyment, ad recall, brand recall,

purchase intent, and other measures of

ad efficacy.

In-depth interviews

Conducted after the survey by experienced

qualitative moderators with 30 respondents

* Linear TV typically contains an eight-minute ad load per 30 minutes of programming.

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Phase I I Research Summary

Screening Questions:

Age, gender, ethnicityVOD usage (all respondents used VOD at least once a month)DVR usageGenres enjoyedSpecific shows (from our list of 19) enjoyed

N = 200

N = 100 N = 100

N = 800

N = 400 N = 400

N = 100/cellN = 100/cell

RECRUITMENT

LINEAR(CONTROL) FVOD

FAST FWDDISABLED

VODLIGHT 1*

VODLIGHT 2*

VODMODERATE*

VODHEAVY*

VODLIGHT 1*

VODLIGHT 2*

VODMODERATE*

VODHEAVY*

FAST FWDENABLEDNON-DVR* DVR*

A A M P P h a s e I I M e t h o d o lo g y

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SHOW SEGMENT 1 SHOW SEGMENT 2 SHOW SEGMENT 3 SHOW SEGMENT 4

A A M P P h a s e I I : K e y F i n d i n g s

One of the most fundamental questions in the VOD

industry has been: “Will consumers accept advertising

on the VOD platform like they do on linear TV?”. The

AAMP Phase II research indicates the answer is a

resounding “yes.”

Dial test data shows that engagement on VOD builds,

even with the presence of advertising (Figure 1). On

average, respondents watching VOD with an ad load

equivalent to that of linear TV were 11% more

engaged with Segment 4 than they were with

Segment 1 during a 30-minute TV show.

When asked unprompted, open-ended questions about

their viewing experience in the post-viewing survey,

most did not mention advertising as a factor that

positively or negatively affected their lab TV experience.

Only 18% of respondents commented on the ads

in a negative way – mainly because they didn’t like

the product, or the creative, or had seen a

particular ad many times before.

Only 6% expressed the unprompted opinion that

there were too many ads.

VOD (with Linear ad load)

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POSITIVE 65%

49%NEGATIVE

Good Ads, Funny, Interesting, Informative, Entertaining, Eye catching

Boring, Bad ads, Couldn’t relate to them, Out of date, Don’t like advertised products

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Acceptance of Advert is ing on VOD

Figure 1

Figu

re 2

When specifically asked about the ads in VOD, 9% said

there were “too many ads,” while 10% commented that

there were “not too many ads.” In general, positive

comments about the advertising outweighed negative

ones (Figure 2).

The survey data also shows that ad load does not

affect viewer enjoyment, with consumers no more

likely to say “too many ads” for an eight-minute linear

ad load than for a three-minute light ad load (Figure

4). In addition, respondents in the heavier ad loads

were no more likely to fast-forward through ads than

those in the light ad load.

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As described above, engagement with VOD programming averaged an 11% increase from Segment 1 to

Segment 4. Importantly, this same increase exists for all three ad loads in VOD, demonstrating that engagement

is not affected by the size of the ad load (Figure 3).

Ad Load Does Not Impact Viewer Enjoyment

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SHOW SEGMENT 1 SHOW SEGMENT 2 SHOW SEGMENT 3 SHOW SEGMENT 4

VOD (Moderate ad load) VOD (Linear ad load)VOD (Light ad load)

Figure 3

“Everything has ads…if there were 10

commercials in a break then it might make

a difference.”

�- male respondent

While it is true that a very small minority of consumers

rejects any amount of advertising, the vast majority has

no issue with having an eight-minute linear ad load on

VOD. Ads are commonplace today, and their presence is

neither a surprise nor an issue for consumers - provided

ad loads do not exceed the perceived “normal” level of a

standard linear-TV ad load.

11%10%

12%

VOD(Light ad load)

VOD(Moderate ad load)

VOD(Linear ad load)

Figure 4

A A M P P h a s e I I : K e y F i n d i n g s

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SHOW SEGMENT 1 SHOW SEGMENT 2 SHOW SEGMENT 3

Linear TV for this study was defined as 50% DVR and 50% ‘live’

SHOW SEGMENT 4

While VOD is fundamentally a television experience, the act of selecting a show heightens viewers’ attention

and engagement and creates a more personalized experience when compared to linear TV. For example, the dial

testing data shows that for non-live programming, VOD is consistently more engaging (Figure 5).

The qualitative, in-depth interviews reaffirmed the added feeling of control that VOD provides viewers. Overall,

VOD offers viewers the choice they have come to expect from “TV Everywhere” type of video, coupled with the

familiarity and comfort of the TV/living room environment.

VOD (with Linear ad load) Linear TV

VOD: TV, But Not as We Know It

Figure 5

A A M P P h a s e I I : K e y F i n d i n g s

Earlier data showed that viewer engagement with a TV

show is not affected by ad load; similarly, ad load has no

impact on the effectiveness of advertising. This is

perhaps the most important finding from the AAMP

Phase II study, and suggests an opportunity for utilizing

full, linear-style inventories.

Not surprisingly, unaided ad recall is slightly higher for

light ad loads. For aided recall, however, average scores

for all ad loads are statistically the same, and consistent

across all demographic sub-groups (Figure 6).

Advertising in VOD significantly and consistently increased purchase intent and interest in advertised brands,

regardless of ad load, indicating no loss in ad efficacy at higher ad loads (Figure 7).

Ad Load on VOD Does Not Have an Impact on Ad E�ect iveness

63% 58% 59%

VOD(Light ad load)

VOD(Moderate ad load)

VOD(Linear ad load)

Aided recall of any of the advertised brands

+3% POINTS

+5% POINTS +5% POINTS +5% POINTS+4% POINTS +4% POINTS

VOD(Light ad load)

VOD(Moderate ad load)

VOD(Linear ad load)

“Very interested” in finding out moreabout advertised brand

VOD(Light ad load)

VOD(Moderate ad load)

VOD(Linear ad load)

Would be first choice brand

Charts show average uplift in % points for all advertised brands versus a control cell

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Figure 6

Figure 7

A A M P P h a s e I I : K e y F i n d i n g s

Phase II of AAMP also explored different ad formats, revealing that 90-second spots can significantly increase

interest in an advertised brand, relative to a comparable 30-second spot. Moreover, for VOD, there is an

“interest premium” reflecting heightened viewer engagement with the platform; a 90-second VOD spot gener-

ates a 64% increase in the level of interest in the advertised brand, relative to linear TV (Figure 8).

The in-depth interviews underscore how consumers’

increased engagement with VOD makes them more

attentive for advertisers bold enough to utilize non-

traditional formats. Consumers believe advertisers

should use this opportunity for innovation, to tell them

something they didn’t know or to reward their height-

ened level of attention. In short, the viewer sentiment

is: “You’ve got me, now impress me.”

VOD Rewards Di�erent Ad Formats

“I expect to see different ads [on VOD] do

something a little different as they know

people don’t want to watch (standard) ads.”

�- female respondent

Percent of viewers “very interested” in finding out more about the advertised brand.

14%

28%

:30 TV spot on VOD :90 Branded Content on VOD

Vs. :30 Spot on VOD Vs. Linear TV

On Light VOD ad load (3 mins per 30) On Linear ad load (8 mins per 30)

14%

23%

:90 Branded Content on Linear TV

:90 Branded Content on VOD

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Figure 8

A A M P P h a s e I I : K e y F i n d i n g s

C lo s i n g Th o u g h t s

As a result of the first two phases of AAMP, the media community is gaining greater clarity regarding the

potential of advertising within VOD programming. Based on the results of the Phase II media lab study, it is

clear that the VOD environment has a positive impact on the level of engagement and responsiveness of

consumers across all ad loads, as well as their interest in new ad formats. The implications of these findings

suggest that agencies, pay-TV operators and programming networks have an opportunity to leverage heavy,

linear-TV ad loads in VOD while advertisers may utilize new, longer-form creative approaches. AAMP will test

these conclusions, and more, in a market trial in the first half of 2012.

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Conclusions

Ac k n o w l e d g e m e n t s

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AAMP Research and Technology Partners

Engagement Marketing Group AAMP Phase I

Engagement Marketing Group (EMG) is an advisory firm of senior executives. Founded in 2006, EMG has

expertise across consumer and market research, strategy development, database and cross platform measure-

ment. Clients include leading companies in the digital services space, often in the early stages of development.

About Ipsos OTX MediaCT AAMP Phase II

Ipsos OTX MediaCT is the market research specialization within Ipsos, built to reach, engage and more

effectively understand today’s digitally driven consumer in the fast-moving media, content and technology

space. Through custom and syndicated research, the company offers a complete view of today’s evolving

media and entertainment ecosystem, and the role played by new technology in driving change.

About NDSAAMP technology partner

NDS is a leading global provider of digital TV technology and advanced advertising solutions for the payTV

industry with customers such as DIRECTV, Cox, Cablevision, Comcast and more than 70 other pay-TV

companies worldwide. NDS has been a participant in AAMP from its inception. Leveraging its expertise in

TV user experience and interface design, as well as STB software and applications, NDS provided the under-

lying media platform for the second phase of AAMP.

©2011 AAMP. All copyrights and logos are property of their respective owners.

AAMPPII151111

Published November 15, 2011