such as the specific advertising messages that will be sent to customers who are classified into certain categories (target market segments) about products, services, and options offered by a company.

Advertising messages may be in the form of interstitial, mixed media or interactive media. An interstitial ad is an advertising message that is inserted "in between" program segments. Interstitial ads can also be pop-ups (when selecting a new channel) and pop-downs (when exiting a selected program). Mixed media advertising is the combining of advertising media along with other video and text graphics on a television or video monitor. Interactive advertising is the process of allowing a user to select or interact with an advertising message.

Figure 1 shows how IPTV advertising messages can be in the form of interstitial broadcast messages, mixed media messages or interactive ads. In example A, a network operator provides a program with advertising messages already inserted (interstitial) into the program. Example B shows how an advertising message may be overlaid or merged into the underlying television program. Example C shows how an advertising message my change based on the selections of the viewer

An IPTV billing system option may include presentation control options for advertising messages. Presentation control is the ability to request, setup and control the display and operation of media on a display such as a television along with the placement and operation windows on the users display. Presentation control is necessary to determine where the advertising messages may appear on a display device in relation to other media. Premium spots and media types (image graphics compared to video) may achieve higher advertising billing rates.

Advertising campaigns may need to be monitored and adjusted by the IPTV service provider due to technical and regulatory require

ments that determine the timing and position of advertising messages. For example, governments may limit the display of certain types of advertising messages (such as tobacco and alcohol) and some brand logo owners require a distance between other product photo images to avoid association of a specific product with a specific brand.

Purchasing ad space and time can be for a guaranteed rate (paid placement), estimated rate (ratings based) or via bidding options. The cost of advertising can be valued based on the amount of ad space (display size) that is dedicated for an ad on the television or video display.

Paid placement is a marketing program where companies or people pay a fee for a specific location on a media page (such as a television screen or on a web page). The use of a paid placement program for IPTV advertising assures the time and insertion regardless of its actual popularity ranking. 

Rating based advertising sales is the offering of services (such as advertising) where the value or cost of the services is determined by the popularity or subscription to the services. Rating based advertising is used for broadcast advertising where the number of recipients and the type of recipients can vary and is determined by a statistical sampling (such as Neilson ratings) after the program has been broadcasted.

Ad bidding is the process of selection of threshold amounts that may be paid for the insertion of advertising messages. Ad bidding requires a bid management process that can monitor and adjust the bid amounts for the requested insertion and placement of ad messages. An example of ad bidding is the paying for ad listings on search engines such as Google or Yahoo.

Bidding for IPTV systems is likely to occur for particular segment types. For example, it may be possible to separately bid for different age groups. Because IPTV systems can interact with the viewer, 

Figure 2, Ad Bidding

Figure 3, IPTV Advertising Reporting

it may be possible to determine which segment the viewer belongs to. For example, if each viewer in a household is provided with a login choice so they can customize their interface (TV screen saver) and access their preferred channel list (MTV compared to discovery channel), it is likely that the actual viewer and their characteristics can be determined.

Figure 2 shows how IPTV ad bidding may work for selling cars. This diagram shows that bidding for advertising messages may occur for particular age groups, income ranges, program types, geographic regions. This example shows that IPTV advertisers may bid for ads that may appear on a variety of programs throughout various geographic regions. The advertiser sets the maximum bid they are willing to offer and a maximum number of impressions may be selected to ensure advertising budgets can be maintained. This example shows that the advertiser may also be able to select if the same ad should be sent to the same person more than one time. 

Measuring the performance and success of advertising program can be accomplished through the use of existing and new types of marketing measurements including ad impressions, ad selections, ad expansions and ad compressions.

To help companies determine the success of their advertising campaigns, advertising reports are tables, graphs or images that may be provided to represent specific aspects of advertising campaigns or the information or data that is created from advertising campaign. IPTV advertising reports may include the number of ad impressions per segment, number of click through selections, the number of ad expansions and the number of ad compressions.

An ad impression is the presentation of an advertising message or image to a media viewer. Ad selections are the clicking or indication that a button or attribute on an advertising message has been selected. Ad selections are indicated by the click through rate (usually in percentage form), which is a ratio of how many selections (red button) or clicks (mouse selections) an advertising message or item within the ad 

message receives from visitors compared to the number of times the advertising message is displayed. An example of click through rate for an ad button that is clicked 5 times out of 100 displays to visitors is 5%.

IPTV offers the opportunity for interactive advertising, which allows a user to select or interact with an advertising message. This interaction may result in a redirecting of the source of an advertising message to play a longer more informative version of the ad (expanded ads). Viewers may also be able to end an advertising message to return to their media program (compressed ads).

Figure 3 shows a sample report that may be generated for IPTV interactive advertising. This example shows that an advertiser has selected to advertise to two age groups.