THIS MONTH, CARTT.CA INVESTIGATES is analyzing the myriad changes underway in television advertising. Last week, we found the appetite for new ways to reach consumers via the TV platform is growing rapidly.
This week, we dive into the actual work being done here – and elsewhere – on making advertising on television provide a far better return on investment.
THIS FALL, ADDRESSABLE TV advertising solutions provider Invidi is running a Canadian trial, along with Cogeco Cable and independent broadcaster CHCH. Capital Networks will manage the ad-insertion operation into Invidi’s Advatar system.
What Invidi does is build an inference engine that accumulates evidence about the viewing experience of TV consumers similar to information that Nielsen in the U.S. and BBM in Canada provide. “That system is good but not used to the fullest because it’s not being used on a real-time basis,” says David Downey, president and CEO of Invidi. “Our system uses the same info but based on capturing what you watch on a real-time basis and higher probability that at this time the viewer is a female and the age range,” for example.
“It’s a lean-back experience,” Downey continued. “From the technology side, there’s not much to do except decide to do it.” Software needs to be installed and there’s some cost on the distribution side and technology on the cable and satellite end, but the bill isn’t sky-high. “It’s tens of thousands not hundreds of thousands,” Downey says. “There are not a lot of capital obstacles.”
CHCH is responsible for identifying opportunities with agencies and to ensure traffic reconciliation of audience delivery to the ad buy. There was some capital investment, admits Cal Millar (right), president and COO of Channel Zero, the Canadian media group that owns CHCH. “We needed to make changes to our broadcast equipment — master control and broadcast origination. I don’t want to get into the magnitude. It may not be the same for everyone.”
He also anticipates more work for the traffic department, although less so for the pilot project, because it covers a relatively small geographic area. “Any time you try to be more accurate, it’s more work. There would be second, third and fourth versions of creative,” explains Millar. Less so for the test, because it’s a relatively small geographic area of South-Central Ontario.
As for the details, it’s still early in the process. Millar says when the announcement went out, they were inundated with calls. Agency meetings are happening this spring and some set-top boxes have already been deployed to friends and family to ensure the model works as predicted.
Privacy Issues
Some customers or viewers might feel a frisson of unease from set-top boxes that, without permission, record your viewing habits, but they already do, and it’s far from a lens looking out at the viewer from the TV. But that, according to Downey, should cause little in the way of privacy concerns.
“The fact is that what we do is very privacy-centric,” he says. “The idea is to accentuate evidence to determine what commercial is appropriate, but we never know if we’re right. We’ll know it’s a female between certain age and who lives in a certain area of city. What we do is a very safe situation from the consumer perspective.”
So as a consumer, you can continue to deny you never watch Cops. Your guilty pleasure secrets are safe…
The Business Model and Revenue Splits
When it comes to commercial costs and revenue splits for what’s hoped will be a premium ad sale, so far, most of that is still up in the air.
Millar says in full deployment there will be a premium for the ability to target ads, but he won’t comment on what the revenue split between the broadcaster and carrier will be. He does admit there’s certainly no incentive for a broadcaster to discount what they already do in the tried-and-true linear broadcast model.
At Shaw Media, details about those potential splits are equally uncertain, says Errol Da-Ré, senior vice-president, sales (left). And, regarding revenue, “the premium isn’t set in stone. What’s the audience in the region? What’s the download of the VOD? It will be as individual as that.”
Ultimately, only a certain percentage of ads will be addressable. It’s a more sophisticated purchase and it’s not for everybody, he added.
From a media buyer’s side, the net result is that they can purchase a pool of inventory then sell that inventory to different clients. “Now a 30-second spot is for one advertiser. With addressable, you can deliver different commercials. You can sell to different clients or approach clients with different products,” says Bruce Neve, CEO of Starcom MediaVest Group Canada
(Starcom MediaVest’s American arm has committed to a $20 million investment in addressable advertising with DirecTV in 2011, promising to spend up to that amount of its clients’ money on those targeted spots when the satellite provider launches the technology.)
Take a hypothetical spot in the popular show Glee. It currently costs $40,000. It goes to women 25 to 54, but the client only wants women 35 to 50, with kids, notes Neve. “Cost per thousand will be higher but it’ll be going to targeted, relevant households. You can go to another client and say ‘$7,500 for people over 50’.”
Interactive Advertising Dives Deeper
A 30-second ad starts. Three seconds later, a banner overlay pops up on the bottom quarter of the screen. There’s a logo and text. “Would you like a free package of this gum?”
Under this model, viewers have a choice to make now. They can arrow over to exit, press select and it will disappear. Or, if they fancy a stick of the new flavour, they can take control, press “yes” and it will ask if it can use their address to send the package. They press “yes” again. It politely thanks them. Shortly afterward, they receive a free pack of gum in the mail.
According to a study by Canoe Ventures, a consortium of the United States’ top cable operators which created a platform for incorporating interactive features into programming and advertising, viewers recalled RFI (request for information) ads 38% of the time, 11% higher than those who didn’t see an interactive ad.
Requests can be for a product sample, a coupon or a brochure. Founded in 2008, Canoe Ventures’ interactive advertising platform is available in 20 million U.S. homes to date, with some rumblings that it, or a version of it, will enter Canada as a partnership among Canadian operators.
NEXT WEEK FROM CARTT.CA INVESTIGATES, WE CONTINUE OUR LOOK AT TELEVISION ADVERTISING WITH MUCH MORE ON INTERACTIVE ADS, PRODUCT PLACEMENTS AND OTHER EXTENSIONS.
Questions, comments, criticism or kudos? Please send it our way to editorial@cartt.ca.
