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Advanced Ads: Addressability Is Paying Off, Panelists Say

Addressable advertising is being used today, making clients’ ad buys more cost-efficient and driving consumer purchases – a good-news story that multichannel-video providers, research providers and a media buyer on a panel said is getting increasingly well known.

Panelists at cable-industry events, talking about ad-technology enhancements, often talk about this being the year of testing or deployment, and next year being the year the technology goes mainstream. Not so at this addressable-advertising panel. “I think if anything this was the year of the ROI,” or return on investment, Caroline Horner, senior vice president of innovation at TV-measurement firm Rentrak, told panel moderator Jon Lafayette, the business editor of Broadcasting & Cable.

DirecTV senior vice president of ad sales Keith Kazerman (pictured above), who’s been in the news lately discussing DirecTV and Dish Network’s new offering of household-addressable ads to political campaigns, defined addressable ads as video advertisements targeted at specific audiences at the household level, via live, on-demand and DVR-recorded programming.

Chris Monteferrante, vice president of ad sales at AT&T AdWorks, said targeting techniques in the AT&T TV Blueprint approach have been shown to reduce the cost-per-thousand impression cost of ad buys by 20% or more.

Rentrak’s Horner said addressable campaigns have also shown to increase the return on investment by 10%-20%, as seen from clients' research, customer-loyalty programs and other evidence.

Kazerman said a DirecTV addressable campaign for an auto company wanting to reach men ages 25-54, with household incomes of $100,000 or more who will be in the market for a new car within the next five months delivered a 20% lift in the numbers of vehicles sold. To a car company, that means “eight figures," or $10 million or more, in incremental revenue, he said. DirecTV can reach 12 million DVR households with addressable ads.

Across the board, panelists said addressable ads should be a portion of a balanced-diet media plan. A complement, in other words, to straightforward buys on TV programs that typically draw consumer in desirable demographic categories, such as aged 18 to 49 years old.

“For a lot of our clients, we are using addressability as a high-value part of their media plans,” Matt Bayer, VP of Advanced TV at agency Media Global. After hearing Kazerman’s auto anecdote, he said he had recently held meetings in Detroit, and that clients love to hear estimates about how much of a sales lift can come from an ad campaign.

Monteferrante (left) had a similar story (again without naming the client). A financial company wanted to reach women ages 35-54, with household income of $100,000-plus and who have children at home. AT&T AdWorks matched those criteria against AT&T U-verse homes and found that about 20% of the 5.5 million homes and 15 million set-tops matched. AdWorks figured out a media buy to reach them, based partly on viewing histories on an aggregated basis, down to the level of what network at what time of day, and placed ads during U-verse's 3 minutes per hour of local avails. He said the client saw savings of more than 40% on a CPM basis -- and that is has since returned for second and third campaigns, at higher budgets. (An AT&T AdWorks rep later said the campaign actually extended beyond U-verse homes to the TV Blueprint interconnected universe, including Cox and other distributors, of 45 million households.)

Addressable ads won’t reach every TV household. But as Pierre Bouvard, senior VP at TiVo Research and Analytics, said, the base is around 40 million homes now, on the way to 50 million, and that’s getting close to halfway to total ubiquity.

“The good news is data-informed marketing works,” Bouvard said. “I think it’s here, and the marketers are in tourism, marketing and [consumer packaged goods]” in addition to political campaigns. “Data-driven targeting takes work, but it’s worth it,” he said.

One thing that would make the work easier would be an increase in automated, programmatic systems for TV-ad buying, Horner said, and Bayer sounded confident that those automation gains would come.

The panel session was part of the Advanced Advertising: Profiting From a Targeted Audience event today (Feb. 27) at the Grand Hyatt in New York City, sponsored by NewBay Media's Multichannel News and Broadcasting & Cable.