DENVER – Is the industry doomed to forever be right around the corner from more advanced, addressable advertising?
That was a key point asked Sunday at the opening general session of the 2009 CTAM Summit of two people who should know: Comcast president and COO Steve Burke and Starcom MediaVest Group CEO Laura Desmond.
Moderator Tom Eisenmann of Harvard Business School quoted industry analyst Craig Moffat who said that addressable advertising is still two years away – and that it’s been a couple of years off for a decade now.
Everyone says they want addressable TV ads that only target just the right audiences, but are we getting closer to that?
While explaining that the Coca-Colas and Wal-Marts of the world surely do want addressable ads, saying “it makes intuitive sense,” Desmond added: “I’d like to believe we’re two years away but I don’t think we are.”
The big advertisers who target the 18-49s in prime time are convinced that at least 40% of their money is being wasted. They want to eliminate that waste and re-deploy those funds elsewhere, she added. “They are yearning to spend more accountable dollars.”
And the carrot is there. Desmond estimates the prime time TV ad market is an $8-to-$9-billion market. However, the direct market segment of the ad business is a $50 billion market – where advertisers know their flyer, for example, is getting in the homes. If the industry could bring direct marketing principles to prime time TV “that number could get very interesting,” she said.
Of course, there is a huge upside for cable to do this, added Burke (especially in the States where selling the local ad avails on U.S. cable channels is a multi-billion-dollar business), but the industry is currently preoccupied EBIF (enhanced, interactive TV) and TV Everywhere, the authentication project where cable and high speed internet customers can view their subscription TV content on TV and online with no extra charges.
But addressable advertising will only really work if it’s something that can scale, and that national thrust is also pushing the rollout of EBIF – and caused the formation of American MSO-owned Canoe Ventures, which is working on addressable advertising and audience measurement on a big scale.
Internet advertising or social network marketing provides all sorts of data that lets advertisers know to a better degree their money has been spent well – or at least gives good direction as to where, or where not, to invest. This data and targeting must come to television, added Desmond.
“Marketers have seen the change in consumer behaviour and consumption to the computer screen over the last five years and it has galvanized them,” she said. “The blending and merging of Internet and television is here and the pace of it will increase.”
One of the aspects of consumer behaviour which has affected TV advertising is the digital video recorder, sometimes known as the ad-skipper. Cable companies are experimenting placing new ad content within DVR-saved content and into VOD files.
But, since DVR was foisted on the cable industry by outsider TiVo and its deceased predecessor Replay – and VOD was only conceived as a movie rental service, the industry ended up with different on demand models rolling out side-by-side where content was stored. “A more elegant solution is to have a network DVR,” said Burke, something which Cablevision has rolled out and which other MSOs are trying.
About a third of Americans have a DVR and they like its functionality and personalization. But advertisers dislike the fast-forward option, something which might be limited in the future, as Burke said: “we have no problem with disabling fast-forward” for the most popular content.
Desmond, however, added that while she’d love to turn back the clock, that isn’t likely to happen as consumers, frustrated at having their FF button suddenly rendered useless, have “the ability to go to what you want on other platforms,” she said.
“I don’t think technology is going to be denied.”
