Sky’s addressable advertising product AdSmart will not cannibalise existing TV advertising but provide a powerful new route to market for “new-to-TV” advertisers, according to director of Adsmart and commercial Jamie West.
Speaking at the Future TV advertising forum in London yesterday West said he was keen to “dispell” some of the myths around the satelite broadcaster’s addressable advertising service AdSmart.
“There are certain myths circulating in the market, that I have heard as recently as yesterday, that I want to dispell. Firstly, AdSmart is not only a video-on-demand (VOD) service, but has been created to work across all platforms - linear, live, VOD and catch-up. It is also not about cannibalising the TV market or empowering advertising, it is there to extend and advance the power of TV,” he said.
West defended the traditional, linear TV advertsing model, saying it would remain for a long time, adding that the creation of its addressable advertising service is designed to encourage advertisers that have not previously had the budget to run lengthy TV broadcasting campaigns.
“It’s not about competing against our broadcast competitors it’s about growing the market…It won’t necessarily be something every advertiser wants to use, it’s just another, powerful route to market. We want to attract new-to-TV advertisers, not cannibalise existing broadcast ad revenues,” he said.
Sky is due to launch the first phase of AdSmart to 7m homes next August, following internal trials. It will then run it for its existing advertisers. During its Upfront season it will invite agencies and advertisers to be part of the tests, which will run from August to December next year. “We are looking for a range of different campaign types for this,” added West.
Phase two of the staggered rollout will launch in 2014.
The backbone of AdSmart is dynamic ad server technology, built-in to Sky+ set -top boxes, which pulls in multiple different campaign creatives and overlays numerous different data sets ensuring the ads sent are personally relevant to each individual home. It can offer advertisers granular targeting including location, affluence, children’s ages, life stage, and financial outlook. It will also overlay third-party data from Experian.
US research has shown addressable advertising reduces “tune away”, according to West. However, he said establishing the best way to measure the linear feed along with the AdSmart impressions is a challenge. As a result it has adopted a transparency policy, sending all signals to BARB to ensure campaigns using addressable advertising are fairly billed. “For example, if Pampers ran a campaign and 2% of their audience was addressable, they would only be charged for 98% - there would be no double counting or payment,” he said.
It has also established a 500,000-strong viewing panel, which informs the broadcaster and advertising partners about people’s viewing habits (nma.co.uk 17 September 2012).
West also said it could potentially be open to opening up AdSmart technology to other UK broadcasters for the desired licence fee. “We can envisage a world where we see AdSmart being used by other UK broadcasters - AdSmart on ITV for example - subject to the right commercial terms,” he added.