It comes as no surprise to me that Sky’s AdSmart advertising service, now rolling out after a successful six-month trial, has attracted some big-name brands. Audi, Tesco, Royal Bank of Scotland and American Airlines are among the launch advertisers.
Ever since the US department store operator John Wanamaker complained, more than a hundred years ago, that: “Half the money I spend on advertising is wasted; the trouble is I don't know which half”, advertisers, particularly on TV, have been searching for more accountability from their advertising, and more certainty that they are reaching the right audience.
In the digital world, their concerns have been addressed to some extent by the way in which ads are sold, on a cost-per-click, or even cost-per-action basis, where they pay only when someone clicks on an ad, in the first instance, or, in the second, when the consumer goes one step further and does something else after the click, such as signing up for something or, in the mobile world, downloading an app perhaps.
In the (mostly) non-interactive world of TV and print advertising, of course, that’s not generally an option, and TV ad buyers still buy ‘spots’ on a cost-per-impression basis – i.e the number of people likely to see the ad and the number of times they might see it – opportunities to see - rather than on them doing anything as a result of seeing it.
For those unfamiliar with it, Sky’s new AdSmart offering seeks to bring a new level of targeting to TV advertising on Sky. Instead of showing the same ads to every viewer during an ad break, the service sends a library of ads to Sky+ HD set-top boxes, which, according to Sky, are in more than a fifth of UK households. AdSmart then selects the ads which best match the household’s profile and inserts them into the ad break.
The ad selection process is based on a combination of the customer’s postcode, and demographic information from various data providers, with Experian singled out as one of those. So a single, filthy rich bachelor watching the football might see an ad for a high-end sports car, while his married, dad-of-four counterpart watching the same match would see one for a people carrier, or maybe for this week’s special offers at Tesco.
The service is available initially on nine channels - Sky 1, Sky 2, Sky Atlantic, Sky Movies, Sky Sports, Sky Arts, Sky Living, Challenge, and Pick TV. No doubt more will be added if it proves popular. I did think, on first seeing the news about this service on Wednesday, that, no matter how clever it looked, it might all end up being a bit pointless if everyone watches commercial TV the way they do in my house – start the programme 15 minutes late and whizz through the adverts at 30x normal speed. But in fact, the AdSmart ads are only served in the live broadcast stream. The inventory is sold on a cost-per-impression basis, with an impression registered only when 75 per cent of an ad has been viewed by the household at normal viewing speed.
I guess the bigger question is how significant this really is, and why. From a targeting perspective, it may be less revolutionary than it might at first appear. Talking to Mick Rigby, MD of Yodel Digital late yesterday, a man who knows the TV buying space very well, he confirmed that, through the auspices of BARB (Broadcaster’s Audience Research Board), TV audience research, in the UK at least, is already pretty thorough. Audience profiling is delivered via BARB’s 5,100-household/11,500-people-strong TV panel, which offers advertisers a pretty detailed analysis of the type of people that watch each programme, complete with detailed profiling information.
The panel is designed to be nationally representative, and panellists record in a diary what they watch on TV each week, providing a pretty detailed picture of the type of person watching each programme, which media planners and buyers can use to spend their clients’ money as effectively as possible in order to reach the type of people they want to reach. The only criticism sometimes levelled at the BARB panel is that the degree of extrapolation required to get from 5,100 households to the UK total of 26.4m (according to the Office of National Statistics) is somewhat large.
Sky’s AdSmart service may have much to do with targeting, Rigby told me, but, he added, don’t be surprised if it also has a lot to do with the seemingly unstoppable move towards programmatic, automated ad buying, which started online, has found its way into mobile, and is now heading full steam ahead for a set-top box near you.