Analysis & Opinion

Are you testing before Advanced TV has scale?

December 3, 2010 Katie Tammaro

It seems many marketers are waiting for the day when Advanced TV gains some national scale and becomes a real marketing opportunity. The truth is that the opportunity already exists, but it’s happening at the local level. Although the major MSOs have formed Project Canoe in an effort to nationalize¬† these local capabilities, the reality is we are a few years away from true scale, so why not test and learn locally while the industry figures out a way to nationalize it?¬† Today,we can target over 71+ million local cable households within 210 DMA’s in new and powerful ways that include Addressability, Interactive TV (ITV) and Video-on-Demand (VOD).

So how can we start testing? National advertisers long for the day when they can target specific consumers with specific messages known as Addressability. For example sending out one message to higher income homes and another to moderate income homes. Although this capability doesn’t exist nationally, it is available locally through Market Segmentation which provides capabilities such as Ad Tag (target consumers based on local sales data, or geographic characteristics); Ad Copy (promote different products/services to different consumers simultaneously); and Geo-Targeting (allows an ad to appear only to specific psychographic and demographic profiles). All of these options allow the advertiser’s message to be more targeted, relevant and effective. In an addressability test conducted in Baltimore, relevant ads that were targeted to specific consumers were 33 percent less likely to be fast-forwarded through. The targeted campaign was actually 65 percent more efficient than a traditional buy despite the premium required to run the split copy.

ITV has the capability to drive sales as consumers can respond immediately to an advertising message via their remote through the use of Interactive TV. Opportunities include: RFI, Polling (surveying consumers through their remote) and Telescoping (direct link to VOD long form content). Benefits of these platforms include the ability to send coupons/literature to a particular audience; cutting costs on direct mail by improving efficiencies and only sending to interested parties; as well as qualifying future prospects. Markets that have the capability to do all three options include New York, Phoenix, Tucson and Honolulu. There are currently 32 additional spot markets where just the RFI feature is available and another nine markets where RFI, Polling and Telescoping are scheduled to be available in Q1/Q2 2011.

The VOD platform offers four types of sponsorship opportunities that can provide value to the brand by having your message appear in a relevant environment with engaging content. Advertisers can own their own digital channel through “Showcase,” where they can air one or more customized long-form video messages from 2-30 minutes. A “Feature”highlights the brand’s products/services next to sponsorable programming housed with other video selections in a channel dedicated to a particular category. For instance, an Aruba Tourism ad housed next to St. Lucia and St. Martin in a “Caribbean destinations” folder. Advertisers can associate their brand with appropriate programming related to their product (cooking, family, fitness) through the use of “Content Sponsorship.” One example would be Nike running a :30 spot for golf clubs before “golf tips” content. Lastly, “On Demand Publishing” allows a retailer’s FSI’s to be transformed into a slideshow video.

There are good reasons why brands such as BMW, Dial, Disney, the NAVY, Home Depot and New Balance have incorporated local advanced TV platforms in their media mix. These clients are looking to establish best practices on a small scale at a lower cost thus positioning themselves to be more competitive once these capabilities reach national scale.