March 6, 2012 – 9:00 am
After several months of aiming addressable TV ads locally, DirecTV will start selling its targeted ads nationally by the end of the second quarter, as the company extends management of its linear ad sales by INVISION to include advanced TV as well.
The move is the culmination of over three years of work between DirecTV and INVISION, which is primarily known for its cross-platform ad sales management software, DealMaker. DirecTV went live with DealMaker in January 2011 for its linear ad sales. “This is the beginning of phase two,” said INVISION CEO Lynda Clarizio in an interview. “This is also the first satellite company we’ve worked with on establishing a national addressable advertising platform. We have the opportunity to roll it out to others, but right now, we’re just working with DirecTV.”
As part of the work with DirecTV, INVISION has also been working with INVIDI, an ad tech firm that provides set-top box software for enabling addressable advertising solutions for cable, satellite, telco and IPTV operators.
Separately, DirecTV has been collaborating on the actual ad sales for its addressable inventory with Publicis’ Starcom MediaVest Group. About four advertisers have been lined up to kick off DirecTV’s national addressable ad program, Rich Forester, DirecTV’s VP of New Business Development, told TVExchanger.
DirecTV and INVISION’s expanded partnership also comes amid a mix of positive and negative news about the progress of addressable TV.
“It’s important for us, because our work with INVISION is about making this process easy and seamless for the advertiser,” Forester said. “If it’s hard for them to commit to addressable advertising, they won’t do it. INVISION has one of the best pricing and planning modules out there. They already had a foot in the door with the management of our linear sales. It made sense to complete the circle and have them manage the addressable side too.”
Two weeks ago, Canoe Ventures, the entity backed by the major cable companies three years ago to deliver a national advanced TV platform, said it was abandoning its pursuit of targeted ads and would concentrate solely on video-on-demand ad insertion. As a result, 120 out of 150 total Canoe staffers were dismissed from their jobs.
Then, this week, Cablevision signaled that it had moved on from Canoe long ago with the announcement that it had executed over 900 advanced advertising campaigns for more than 600 advertisers last year.
“I do think that you’ll start seeing more addressable systems being fully launched this year,” Clarizio said. “The technology systems are place right now. And DirecTV’s entry into the addressable market on a national basis will spur the other pay TV providers to do more as well.”
Since the satellite TV companies like DirecTV and Dish Network were never a part of Canoe and the cable industry’s attempt to collectively plant a flag in leading the charge on addressable TV, they have always been able to move more independently.
Many media buyers point to satellite, as well as telco offerings like Verizon FiOS, as having certain advantages over cable. For one thing, cable companies have been hampered in creating a national platform for addressable TV because most of those subscribers come from legacy systems that have to be literally stitched together by new wires.
While those problems have been largely ironed out, the challenge right now involves developing a standard currency and platform for executing addressable TV advertising nationally.
Up to this point, DirecTV had struck a deal almost two years ago with NCC Media, the cable ad sales rep firm, on local addressable sales. That programs covers about 4 million households. Once DirecTV turns on the national advanced TV ad sales system, it expects to cover 10 million of the roughly 19.9 subscribers it currently has.
“Eventually, we want all of our advertising to be addressable, but I’m not going to get into benchmarks,” Forester said. “Addressable is important because most advertisers biggest complaint is about waste. Everyone always cites that example about the marketer who knows 50 percent of his ad dollars are working, but doesn’t know which 50 percent it is.
“And the waste is really on the sales side, not the buy side,” he continued. “If we sell a spot aimed at adults 18-34, only 30 percent of the audience may fall into that range. For argument’s sake, let’s say we charge an effective CPM of about $50 for 18-34. Think of what you can do if you are able to accurately segment that out more specifically to, say, 25- to 54s who drive foreign cars. You could charge $50 for each targeted segment that you isolate, because the ads are naturally more effective. While that’s good for us, it also frees up the advertiser by giving them exactly what they want. That ultimately allows them to spend more in other places.”
While there have been some worries that addressable TV advertising will simply take the form of cheap, infomercial like “call to action” advertising, Clarizio said that advanced TV will have a much closer resemblance to high quality brand advertising. “It’s particularly well-suited to brand advertising that is geographically based,” she said. “And since this all anonymous data, it is still aiming wider than a more narrow infomercial. Among the things addressable ads mean is, that you’re able to send ads to people who have consumed similar content on TV before. And that ability enhances the premium experience that brand TV ad dollars want to surround themselves with.”
By David Kaplan
March 6, 2012 – 9:00 am