HD Radio Ad Substitution

February 1, 2009


The term “targeted advertising” is a broadcasting buzzword. Potential profiteers talk about targeted advertising because it promises to be lucrative, and it may be promising for HD Radio broadcasters.

Not every listener is going to want to participate in targeted advertising. Our society has raised suspicions about privacy to paranoia proportions. However, there will be those who are unconcerned. There will be those who prefer to hear commercials that match their lifestyle. There will be listeners that desire certain free-but-protected programming and are willing to opt-in to receive premium content.

Participating consumers may never know the commercials they receive are different: They will not hear any more or fewer commercials. They will receive different commercials that have meaning for their lives.

This is based on an ad substitution system NDS created for television. With ad substitution, cost per thousand (CPM) estimates for a targeted television advertisement are 10 times that of a normal broadcast ad. If we can say that this financial return is also true for radio, then just 10 percent listening audience participation will double station advertising revenue. What station will refuse this return?

The concept

Figure 1. Station installation of a targeted ad system.

Figure 1. Station installation of a targeted ad system.

As a program is transmitted on the radio, all the receivers play the same audio. When a commercial plays, and if the business rules state that ad substitution is acceptable, participating radios will play an ad that the listener would prefer to hear based upon his demographics, lifestyle, preferences and interests. The radio receiver, when substituting, chooses among the prerecorded commercials in its memory. These commercials are delivered through the radio station and the targeted receiver records them. Recording never disrupts the listener's experience.

Receivers are addressable and can be arranged into specific target groups. A receiver may belong to many different groups. The receiver will automatically identify the ads it is supposed to receive and record.

A participating station will transmit an HD Radio signal to deliver the commercial content. A broker will organize demographics and groupings. Substitute commercials broadcast as per system scheduling, matching the contract between the advertiser and radio station. The station audio playback system triggers transport stream signaling as per the pre-established business rules.

Key decision factors

Because HD Radio broadcast bandwidth is limited, parallel streams may not be bandwidth efficient. Therefore, pre-recording substitute material is the chosen methodology. Commercial delivery does not need to be real-time. A narrow pipe delivers a pre-recorded commercial encoded as an HDC file or a data file such as a JPG image in slower than real-time speed, which maintains quality while consuming very little bandwidth. A 48kb/s encoded file delivered on a 5kb/s pipe transmits a 30-second audio commercial in five minutes. If a recording is incomplete, it may be suspended until the commercial is broadcast again in the content carousel. This ensures efficient recording and more completed deliveries.

The receiver recognizes its entitlements and the content addressed to it. The receiver records commercials and files onto flash memory in the unit. Recorded content plays back as directed by triggers in the transmission transport stream.

Commercials delivered by a radio station substitute for broadcast commercials while the consumer is listening to that station. Commercials delivered by one radio station can substitute when listening to a different radio station if and only if the participating advertiser works with both stations. The receiver must also account for both the tuned station and the delivering station.

Broadcast architecture

The broadcast architecture includes a data carousel for content playout. The carousel playout logically connects to a data pipe/data channel in the HD Radio Importer. The carousel also provides information into the metrics system, providing transmission accountability.

The metrics or measurement part of the system will also accommodate feedback from the field. The field reporting structure may require direct feedback as well as delayed feedback. Feedback may also include subjective estimates made from listening patterns, expected deliveries and triggered substitution statistics.



Figure 2. Implementing targeted advertising in a radio receiver.

Figure 2. Implementing targeted advertising in a radio receiver.

The Importer will insert playback triggers that activate radio operation. The signal to insert a trigger comes from the automation system. When an ad plays and when the automation system signals, the Importer inserts the substitution trigger into the transport stream. Radio addressability is a key system factor. The system must make a connection between the customer grouping or demographics and the targeted radios.

The connection is made through NDS Radioguard HD Radio conditional access, which includes receiver addressability. Every radio carries a unique identification, serialized at the HD decoder IC level. In addition to the addressability, the Radioguard implementation will enhance the delivery through its security, eliminating possible spoofing.

The system translates and automates the demographic and grouping information into addressable entitlements for participating radios. The content is associated to groups, thus defining the delivery destinations. The system packages the content and schedules the deliverables through the carousel playout.

Radio/receiver architecture

A target radio must have memory storage to accommodate the system. Recorded target advertising will be played back as directed. Content stored in memory is identified by associated metadata. The playback system utilizes that information and organizes a playout priority. When signaled by the radio station broadcast, the substitute advertising will play in place of the aired commercial.

Any ad delivered by and associated with the tuned radio station may be substituted. Ads delivered by another station but still associated with the tuned station are OK, meaning that the advertising participants can and may cooperate.

The radio must identify the station that the consumer is listening to and the source of the advertising content. The metrics system may automatically report, may report later, or may provide assumed information based upon recording, listening and playback statistics. The primary source of this information may be the radio receiver itself.

For this system to become a completed product, several entities must participate, including NDS for conditional access and datacasting, Ibiquity for the HD Radio transport stream and recording, broadcasters, advertisers, ad agencies, a demographic/grouping creator, automation system manufacturers, metrics and measurement services, and radio receiver manufacturers. While this appears to be a lengthy list, most of the required technology pieces already exist. Coordination is the important issue, combining all the technology into one cohesive package. The most difficult portion will be the legal contracts.

Conditional access is only used on multicast channels. The main HD Radio channel is always free-to-air. However, targeted advertising works on any broadcast channel, including the main channel. While the delivered ads may be targeted, encrypted, addressed and delivered by the conditional access system through the multicast only, decrypting and substituting on the main channel is easily accomplished by the radio.


Latapie is chief technology officer at NDS Americas, and Rucktenwald is the director of data applications sales at NDS Americas, Costa Mesa, CA.


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