The landmark study, which examined the viewing behavior of more than 1,000 consumers, revealed that advertising within a VOD environment has a positive impact on the level of engagement of consumers — enabling agencies, cable operators and networks to leverage full, linear TV ad loads, while allowing advertisers to utilize longer-form approaches that can serve as avenues for enhanced creativity.

Conducted at unprecedented scale with television programming from 11 AAMP member broadcast and cable networks and branded messaging from 10 national advertisers across six categories, the AAMP study revealed four basic themes:

• Advertisements within a VOD context statistically have the same impact, no matter what the size of the ad load;
• Because consumers view VOD as television, they accept advertising on VOD as a logical part of the on-demand experience;
• On-demand television has a positive effect on consumers’ sense of control over content and advertising; and
• VOD provides opportunities for increased ad durations that can foster greater storytelling and information sharing by advertisers

“When it comes to advertising, the ‘TV Environment‘ absolutely matters,” said Bill Koenigsberg, president, CEO and founder of Horizon Media. “If there is one finding from this study that is particularly relevant to the media industry, it’s this: consumers will watch, recall and respond even to heavy loads of ads within VOD programming.”

“The AAMP findings mirror our own customers’ favorable response to increased choice and control with their entertainment viewing,” said Marcien Jenckes, senior vice president and general manager, video services for Comcast. “Our ultimate goal is to provide our customers with the best programming content available, while providing opportunities for sponsors and advertisers to benefit from the On Demand platform.”

Conducted by Ipsos OTX, Phase II of the AAMP study tested three different VOD ad loads within 19 primetime TV shows or segments of 30 minutes each. The test formats included: a “Light” load with three minutes of inventory; a “Moderate” load of five and one-half minutes of advertising; and a “Heavy” load which contained eight minutes of advertising. In addition, the study tested a second version of the “Light” load that included a 90-second ad unit. All groups were benchmarked against the standard eight-minute linear ad load.

Participants watched comedy, drama and reality programming that contained ads from various categories such automotive, consumer products, financial services, pharmaceutical, retail and technology. The tests were conducted in custom-built media labs in New York and Los Angeles, and utilized a sophisticated set-top box VOD interface that was custom-built by NDS, a leading global provider of digital TV technology and advanced advertising solutions for the pay TV industry. Consumers used a specially created mobile handset app to record their experiences while viewing; in addition, in-depth follow-up interviews were conducted with 30 participants.

Among the most significant findings were clear indications that:

The size of the ad load has no impact on viewer engagement with VOD.
Aided recall of advertised brands was statistically the same (63%-64% for light loads and 58% and 59% for moderate and heavy loads). In addition, VOD ads delivered an uplift of between three and five percentage points across all loads in both interest in finding out about a particular brand, and purchase intent for an advertised brand.

Advertising with VOD does not impact viewer enjoyment.

Between 31% and 38% of participants across all ad loads rated the TV viewing experience as “excellent,” and between 65% and 75% rated the experience as “excellent” or “very good.” This compares favorably to the “excellent” (29%) and “excellent or very good” (66%) for linear television. For all ad loads, enjoyment increased throughout the show. Further, it was clear from post-test, in-depth consumer interviews with randomly selected participants that the presence of ads across a diversity of media platforms has increased acceptance of ads in general.

Consumers are more receptive to longer-form ads on VOD, and that longer-form ads can have a greater impact than traditional 30-second spots.
Viewer interest in finding out more about a particular brand featured in a 90-second ad was 64% higher than interest elicited by the same 90-second ad in linear television, and fully double the interest generated by a VOD 30-second advertisement.

Additional Study Detail and Reports
The Phase II study follows the first phase of AAMP — an in-depth qualitative study that established a baseline understanding of perceptions among industry thought leaders and influencers around dynamic VOD advertising. Public reports discussing the findings of Phase I and Phase II are available for download at aamp.blackarrow.tv. Phase III, a market trial leveraging findings from the prior phases, will be conducted in the first half of 2012.

About AAMP
The Advanced Advertising Media Project (AAMP) is an industry-wide research initiative created to measure the effectiveness of advertising within free, on-demand television programs. The multistage project is comprised of three parts: an in-depth industry survey, a consumer VOD media research laboratory, and a live, in-market trial. AAMP participants include stakeholders from various disciplines around the industry, including 4A’s, A&E Television Networks, ABC, AMC Networks, BlackArrow, CBS, Comcast, CTAM, Digitas, Discovery Communications, Horizon Media, Intel, NBCU and NDS. http://aamp.blackarrow.tv

About the 4A’s
The 4A’s is the national trade association of the advertising agency business. Its membership comprises virtually all of the large, multinational agencies and hundreds of small to mid-sized agencies across the country. The 1,200 member agency offices served by the 4A’s employ 65,000 people; offer a wide range of marketing communications services, and place 80 percent of all national advertising. The management-oriented association helps its members build their businesses, and acts as the industry’s spokesperson with government, media, and the public sector. www.aaaa.org and @4As.

About BlackArrow, Inc.
BlackArrow is a leading worldwide provider of advanced advertising technology for New Television platforms. The company’s multiplatform advertising system is designed specifically for video content distributed over any on-demand platform, enabling networks and content distributors to maximize advertising revenues. BlackArrow is privately held, and backed by Cisco Systems (NASDAQ: CSCO), Comcast Interactive Capital, Intel Capital (NASDAQ: INTC), Mayfield Fund, Motorola Ventures, NDS Group, LTD., Polaris Venture Partners and Time Warner Cable. The company has offices in New York City and San Jose, Calif. http://www.blackarrow.tv

# # #

Media Contacts:

Paul Schneider, PSPR, Inc., for BlackArrow
Tel. 215.817.4384 (mobile)
pspr@att.net

Joan Behan-Duncan, PR manager, 4A’s
Tel. 212.850.0724
JBehan-Duncan@aaaa.org

BlackArrow is a trademark of BlackArrow, Inc. All other trademarks are property of their respective owners.

New York, N.Y., May 11, 2011 – The Phase I survey of the Advanced Advertising Media Project (AAMP), an industry-wide research initiative to measure the impact of advertising within free video-on-demand (VOD), yielded insight on the diversity of attitudes toward VOD advertising; the importance of marketing VOD as a product; and the need for a better understanding of consumer behaviors. The study further surfaced the overarching belief that free VOD has the potential to play a unique role in the television ecosystem as a platform for relationship marketing between advertisers and consumers. These central findings were among the baseline needs identified for VOD television programming to achieve its potential as an advertising medium.

In findings presented today by Carl Fremont, executive vice president and global media director for Digitas, AAMP co-founders the 4A’s and BlackArrow shared the results of an extensive study among key thought leaders and influencers in the media industry. The research points to a continued horizon of expectations regarding VOD, including a role for the platform as a bridge that connects linear TV and online environments.

“There was a clear sense among all participants in the study that VOD offers unique strategic advantages to service providers, programmers and advertisers,” said Mike Donahue, executive vice president, 4A’s. “At the same time there was widespread affirmation that VOD is advanced television – not simply an alternate form of Web-based video, and as such requires specific agency approaches that maximize its value to consumers and the media industry.”

Designed to reveal a baseline understanding of industry perceptions and opportunities related to dynamic VOD advertising, the AAMP Phase I media insights study included more than 20 in-depth interviews with media industry thought leaders. Among the most widespread findings:

Long-held attitudes and perceptions remain that VOD is a medium full of potential — but hampered by a lack of established business practices. At the same time, respondents were definitive about VOD’s massive opportunity for growth and viability as an advertising platform.
“Our VOD growth has been phenomenal, as we are actually seeing good VOD growth numbers across the board and have been for a number of years,” noted a programmer advertising sales executive. “I think it goes back to that fundamental or philosophical question, which is: Is it marketing your own shows and driving tune-in? Or, is it about…extending your reach and providing ad impressions?”

Metrics that approach established measurement tools already in use within the industry were identified as critical to helping advertisers understand 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,” commented one programmer research executive. “Any metric we have is always, in some way, a proxy for a real gain: ‘Did we sell more Coca-Cola today?’”

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 don’t think we understand what consumers decided about VOD and what they really want and expect…Right now, I think a lot of people are thinking, ‘Oh, let’s just throw in a bunch of commercials like we do on regular TV and we will make money’. I don’t think that is going to happen,” noted one cable distributor executive.

VOD needs to be packaged as a product, and marketed to both advertisers and consumers in new ways that highlight the unique qualities of the VOD medium.
“How that inventory is presented to the market has the furthest to go. I am not sure that the merchandising of the platform and the way in which it will be brought to market actually matches well with the functionality provided,” according to a cable operator VOD executive.

VOD affords an opportunity for advertisers to connect to consumers in a highly engaging, 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,” noted a senior advertiser marketing executive.

Among the companies that participated in the survey were A&E Television Network, Cablevision-RASCO, CBS, Combe, Comcast, Digitas, Discovery, FOX, General Motors, Interpublic Group (IPG), Mediasmith, MediaVest, NBCU, Rainbow Media and Starcom. An abbreviated version of the detailed Phase I study is now available for download from the AAMP website, by visiting http://aamp.blackarrow.tv.

Today, the AAMP working group has completed the test design and has defined the parameters of the second phase of the study – a VOD research lab that explores and validates consumers’ responses when engaging with advertising in simulated VOD versus traditional TV environments. Phase II is expected to be complete by the end of the summer.

“It is way too hard [to sell and manage VOD advertising,]” said one network ad sales executive involved in the Phase I study. “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.”

About AAMP
The Advanced Advertising Media Project (AAMP) is an industry-wide research initiative created to measure the effectiveness of advertising within on-demand television programs. The multistage project is comprised of three parts: an in-depth industry survey, a consumer VOD media research laboratory, and a live, in-market trial. AAMP participants include stakeholders from various disciplines around the industry, including 4A’s, A&E Television Networks, ABC, BlackArrow, CBS, Comcast, CTAM, Digitas, Discovery Communications, Horizon Media, Intel, NBCU, NDS and Rainbow Media, among others. http://aamp.blackarrow.tv

About the 4A’s
The 4A’s is the national trade association of the advertising agency business. Its membership comprises virtually all of the large, multinational agencies and hundreds of small to mid-sized agencies across the country. The 1,200 member agency offices served by the 4A’s employ 65,000 people; offer a wide range of marketing communications services, and place 80 percent of all national advertising. The management-oriented association helps its members build their businesses, and acts as the industry’s spokesperson with government, media, and the public sector. www.aaaa.org and @4As. 

About BlackArrow, Inc.
BlackArrow is a leading worldwide provider of advanced advertising technology for New Television platforms. The company’s multiplatform advertising system is designed specifically for video content distributed over any on-demand platform, enabling networks and content distributors to maximize advertising revenues. BlackArrow is privately held, and backed by Cisco Systems (NASDAQ: CSCO), Comcast Interactive Capital, Intel Capital (NASDAQ: INTC), Mayfield Fund, Motorola Ventures, NDS Group, LTD. and Polaris Venture Partners. The company has offices in New York City and San Jose, Calif. http://www.blackarrow.tv

# # #

Media Contacts:
Paul Schneider, PSPR, Inc., for BlackArrow
Tel. 215.817.4384 (mobile)
pspr@att.net

Joan Behan-Duncan, PR manager, 4A’s
Tel. 212.850.0724
JBehan-Duncan@aaaa.org

BlackArrow is a trademark of BlackArrow, Inc. All other trademarks are property of their respective owners.

The four partners, representing a cross section of the broadcast, cable marketing and technical communities, enhance the areas of subject matter expertise available to the AAMP initiative. A total of 14 leading companies thus far have committed to the program, which has been designed to help the media industry shape dynamic advertising strategies and measurement that can accelerate the monetization of VOD content.

“Free video on demand is a key distribution channel for cable companies and programmers, and is also right in step with the shift in consumers’ viewing habits toward watching what they want, when they want,” said Angie Britt, VP, Advanced Products for CTAM. “By working together with the AAMP partners, we hope to provide our members with the data they need to unlock the potential of free VOD as a revenue source.”

Previously announced participants in the AAMP program include the 4A’s, A&E Television Networks, BlackArrow, CBS, Comcast, Digitas, Discovery Communications, Horizon Media, NDS and Rainbow Media. The AAMP partners anticipate announcing results of the first of three phases of research next week.

About AAMP
The Advanced Advertising Media Project (AAMP) is an industry-wide research initiative created to measure the effectiveness of advertising within on-demand television programs. The multistage project is comprised of three parts: an in-depth industry survey, a consumer VOD media research laboratory, and a live, in-market trial. AAMP participants include stakeholders from various disciplines around the industry, including 4A’s, A&E Television Networks, ABC, BlackArrow, CBS, Comcast, CTAM, Digitas, Discovery Communications, Horizon Media, Intel, NBCU, NDS and Rainbow Media, among others. http://aamp.blackarrow.tv

About the 4A’s
The 4A’s is the national trade association of the advertising agency business. Its membership comprises virtually all of the large, multinational agencies and hundreds of small and mid-sized agencies from across the country. The 1,200 member agency offices served by the 4A’s employ 65,000 people; offer a wide range of marketing communications services, and place 80 percent of all national advertising. The management-oriented association founded in 1917 helps its members build their businesses, and acts as the industry’s spokesperson with government, media, and the public sector. For more information, visit the 4A’s Web site at www.aaaa.org or on twitter @4As.

About BlackArrow, Inc.
BlackArrow is a leading worldwide provider of advanced advertising technology for New Television platforms. The company’s multiplatform advertising system is designed specifically for video content distributed over any on-demand platform, enabling networks and content distributors to maximize advertising revenues. BlackArrow is privately held, and backed by Cisco Systems (NASDAQ: CSCO), Comcast Interactive Capital, Intel Capital (NASDAQ: INTC), Mayfield Fund, Motorola Ventures, NDS Group, LTD. and Polaris Venture Partners. The company has offices in New York City and San Jose, Calif. http://www.blackarrow.tv

# # #

Media Contacts:
Paul Schneider, PSPR, Inc., for BlackArrow
Tel. 215.817.4384 (mobile)
pspr@att.net

Joan Behan-Duncan, PR manager, 4A’s
Tel. 212.850.0724
JBehan-Duncan@aaaa.org

BlackArrow is a trademark of BlackArrow, Inc. All other trademarks are property of their respective owners.

This multiphase initiative will test, measure, analyze and compare consumer perceptions and responses to advertising within VOD versus traditional TV environments. AAMP will leverage the collective knowledge and expertise of advertisers, agencies, programmers and cable system operators to shape dynamic advertising strategies and measurement that can help the industry to accelerate the monetization of VOD content.

Participants in the AAMP program include companies such as the 4A’s, A&E Television Networks, BlackArrow, CBS, Comcast, Digitas, Discovery Communications, Horizon Media, NDS and Rainbow Media, among others.

“As consumer viewing trends evolve, agencies are seeking clarification on how best to integrate numerous TV viewing platforms into their media buys and optimize value for advertisers,” said Mike Donahue, executive vice president, 4A’s. “By working together with industry leaders on the AAMP initiative, we will be able to gather and analyze data that that supports research-based, strategic decisions around advanced VOD advertising.”

In the first phase of the study, AAMP researchers completed in-depth interviews of more than 20 media industry thought leaders to secure a baseline understanding of industry perceptions and opportunities related to dynamic VOD advertising. Study results, to be announced shortly, will cover such topics as the current perceptions of TV; the future of advanced TV; barriers to advertising adoption within VOD; and the prioritization of requirements – by sector – of VOD advertising.

Phase Two will comprise a VOD media research lab to explore and validate consumers’ experiences when engaging with advertising in simulated VOD and linear TV environments. Phase Three, an in-market test, will employ the collected media lab data as a basis for comparison with real-world results in a live, consumer trial.

“The advertising community clearly desires the mechanisms to deliver effective, relevant messages to on-demand viewers, but also needs to understand how technical potential and consumer usage will converge to create optimal business models,” said Carl Fremont, Executive Vice-President, Global Media Director Digitas. “We strive at Digitas to deliver effective, relevant brand content to an audience that is increasingly becoming on-demand and interactive. Because AAMP explores a wide variety of VOD advertising variables, the initiative is uniquely designed to identify the obstacles and opportunities for brand content that are shaping new on-demand advertising models and measurement.”

“As TV consumption continues to fragment across a myriad of platforms and devices, it’s critical for key stakeholders in the New TV world to work together to develop new advertising business models that are sustainable in the long term,” said Nick Troiano, president of BlackArrow. “AAMP is designed to take a global view of the critical short- and long-term needs of the major stakeholders, and to help the entire industry to prioritize the steps that need to be taken to achieve a broad-scale deployment of effective VOD advertising.”

About AAMP
The Advanced Advertising Media Project (AAMP) is an industry-wide research initiative created to measure the effectiveness of advertising within on-demand television programs. The multistage project is comprised of three parts: an in-depth industry survey, a consumer VOD media research laboratory, and a live, in-market trial. AAMP participants include stakeholders from various disciplines around the industry, including 4A’s, A&E Television Networks, BlackArrow, CBS, Comcast, Digitas, Discovery Communications, Horizon Media, NDS and Rainbow Media, among others. http://aamp.blackarrow.tv

About the 4A’s
The 4A’s is the national trade association of the advertising agency business. The 1,200 member agency offices it serves in the U.S. employ 65,000 people; offer a wide range of marketing communications services, and place 80 percent of all national advertising. The management-oriented association helps its members build their businesses, and acts as the industry’s spokesperson with government, media, and the public sector. For more information, visit the 4A’s Web site at http://www.aaaa.org

About BlackArrow, Inc.
BlackArrow is a leading worldwide provider of advanced advertising technology for New Television platforms. The company’s multiplatform advertising system is designed specifically for video content distributed over any on-demand platform, enabling networks and content distributors to maximize advertising revenues. BlackArrow is privately held, and backed by Cisco Systems (NASDAQ: CSCO), Comcast Interactive Capital, Intel Capital (NASDAQ: INTC), Mayfield Fund, Motorola Ventures, NDS Group, LTD. and Polaris Venture Partners. The company has offices in New York City and San Jose, Calif. http://www.blackarrow.tv

# # #

Media Contacts:
Paul Schneider, PSPR, Inc., for BlackArrow
Tel. 215.817.4384 (office), 215.817.4384 (mobile)
pspr@att.net

Joan Behan-Duncan, public relations manager, 4A’s
Tel. 212.850.0724
JBehan-Duncan@aaaa.org