SeaChange International, Inc. (Nasdaq: SEAC) announced on May 24th an advertising solution in on-demand television including targeted advertising delivery with "ZIP-plus-four" precision. Later versions will allow targeting at the household level.

Available this summer, the SeaChange on-demand advertising solution lets cable companies "begin inserting advertisements into individual on-demand streams." Initially this solution enables ad insertions at the beginning and end of streamed programs. It includes stream splicing and execution automation to ensure that ads are inserted with high-quality video and audio and are measured with atomic precision.

" Twenty-million homes have access to on-demand television and this year they'll request over one billion streams," said James Kelso, Vice President/General Manager of Broadband Systems at SeaChange. "This SeaChange solution provides all of the control and automation that operators need to begin harvesting the promise of VOD advertising."

The new solution automatically ingests ads from spot libraries, prepares them for dynamic insertion (including conversion to VOD encode specifications), and orders placement based on time and on categories such as program, genre, network/content source, zone or ZIP-plus-four.

I have to be honest, I thought SeaChange was able to do this already. Never-the-less, it is a positive step forward for the currently almost non-existent VOD advertising segment.

To me, the more interesting development is that SeaChange says this solution provides the in-depth reporting on aggregate settop activity -- view, rewind, pause, fast-forward -- during ads. It also provides a view of VOD ad inventory, defining breaks and avails for groups of VOD programming, and indicates undersold and oversold avails. Its tracking of VOD trick mode activity during ad viewing is conducted independently of VOD program reporting.