Wired Magazine mentioned it first; 2014 will be the year of addressable TV advertising.
Trials of addressable ads are already taking place in the US. Pay-per-view cable channel Starz, working with cable operator DirecTV, has been using data about which subscribers use video-on-demand, to pitch ads for its shows. More importantly, it also uses the data to avoid streaming ads to existing Starz subscribers, to prevent preaching to the converted. The result is a 49 per cent jump in sales, compared to a control group, from households shown the targeted ads. HBO has been using a similar system to promote Game of Thrones.
Wired Magazine also just predicted that Facebook will own all mobile advertising, Why? How? Because they own a social network and have a wealth of data on consumer preferences and a predictive analytics team that can match ads with what consumers are most likely to click on.
Google and other outfits operate similar mobile ad networks, but Facebook is unique in its ability to target ads based on user demographics, interests, location, and activities involving everything from internet searches to online shopping. That’s the benefit of running a social network.
In this new ecosystem of advertising, its not enough just to own a vast source of data about consumer preferences, the other half of the equation, understanding the myriad of nuances for how best to utilize that data and serve up the best ad, is equally if not more important.
Take for example, the famous case of Target retail stores, who predicted a woman’s pregnancy before she knew it herself. This New York Times Article is one of the best stories out there at describing the trials and tribulations of addressable advertising, and just how Target retail stores, and their big data analytics team has discovered many of the secrets towards deploying effective advertising.
As Pole’s computers crawled through the data, he was able to identify about 25 products that, when analyzed together, allowed him to assign each shopper a “pregnancy prediction” score. More important, he could also estimate her due date to within a small window, so Target could send coupons timed to very specific stages of her pregnancy.
We are at the forefront of a whole new industry; Big Data, or more precisely, “Information Science”. Addressable TV advertising is just one niche of the big data revolution. Harvard Magazine does an excellent job of covering Big Data and how it will shape the future for most industries.
In marketing, familiar uses of big data include “recommendation engines” like those used by companies such as Netflix and Amazon to make purchase suggestions based on the prior interests of one customer as compared to millions of others.
But as of today, most advertising dollars continues to be spent on commercials for the big screen TV at home, and increasingly on ads for the second screen; including mobile phones, tablets, and other connected devices. And with this shift, there is a growing need to provide targeted ads for OTT and VOD content.
A recent deal has been struck between BlackArrow, a leading Dynamic Ad Insertion technology company, and Nielson, the leading television research, analytics and ratings firm, to begin offering on-demand commercial ratings (ODCR).
That’s where BlackArrow comes into play. By allowing the operator to switch out ads in VOD content on the fly, BlackArrow makes every older streaming episode an environment for the same ads that are now airing in CBS’ live broadcasts. As Nielsen’s ODCR scheme is designed to measure VOD deliveries that occur beyond the three-day window, those once-neglected views are now just as valuable as live ratings.
This Newsweek article provides excellent coverage about the BlackArrow Nielsen ODCR partnership and what it means for TV operators and consumers.
The Nielsen-BlackArrow pact comes as the networks increasingly look for ways to help wean viewers off the DVR, which makes commercial-skipping as easy as holding down a button while staring off into space. A far more advertiser-friendly service, VOD promises to add incremental value to linear TV buys. At the same time, viewers needn’t worry about running out of memory or forgetting to record a favorite show.
BlackArrow CEO Dean Denhart discusses this new landscape of addressable TV advertising with Fox News at the LA Cable TV Show.
Television advertising will perhaps reign supreme for quite some time, with relevant addressable targeted TV advertising coming to the forefront as one of the most sought-after technologies for both live as well as pre-recorded TV content. This is indeed the year of addressable TV advertising.