Research
Coming, the ad addressed right to you
By Kevin Downey
Jun 5, 2009 - 6:19:22 AM

For years, the cable networks stood behind the broadcast networks in the eyes of advertisers, and it was never more so than during the upfront market. The broadcast networks got first crack at the big deals and the big dollars.

And it will likely be so again in this upfront market, which is about to break.

But it could be the last such upfront.

Next year, the cable networks will likely come to the upfront with something the networks cannot offer advertisers: the ability to target ads to specific households within specific markets and neighborhoods based on a range of demographic data, such as income.

Addressable advertising, as it's called, has been something local cable operators have been offering for years, and it's given them a huge advantage over local broadcast stations.

But soon it will be something cable networks will be able to offer as well, or that's the hope.

A number players are working to develop addressable advertising on a national level, including the bigger media buying agencies.

One venture that's gotten a lot of attention in recent weeks is Canoe Ventures, a group formed by cable operators like Comcast, Cablevision and Time Warner Cable, which is now testing what it calls community addressable messaging--CAM for short. AMC signed on the other day as CAM's first test network.

The idea behind CAM and other systems for addressable advertising is targeting ads to consumers most likely to buy specific products and services, based on specific demographic data.

That sets it dramatically apart from traditional mass marketing, where the ad is delivered to the largest numbers possible, on the assumption that the message will reach those consumers most likely to buy that product.

“One of the fundamentals of advertising is to get the correct message in front of the correct people,” says Bruce Dennler, chief relationship officer of agency relations at Canoe. “Canoe Ventures’ addressable advertising products allow much greater flexibility in doing this.”

Just when these services will be up and running is hard to say. Canoe had hoped to have CAM in fully operational in May, but now there's no timetable on the launch, which is just entering the testing phase.

At some point, Canoe plans to offer the service to broadcast networks but that could be years off. It first must work through some technical issues.

Media buyers say Canoe’s CAM is a move in the right direction because it means advertisers won’t waste money delivering messages to consumers who have no inclination or reason to buy the advertised product.

“Hyper-targeting is something we’ve been talking about for years,” says Brad Adgate, senior vice president of corporate research at Horizon Media. “I think this shows some promise. There will be a lot of testing and trial and error, though.”

But buyers also note that the system Canoe is now testing falls short of true addressable advertising. It can only target by household income, not by any of the other demographics that advertisers value, such as sex and age, and it can only target by neighborhood, not to specific households.

“We support anything that moves us in the direction of addressable advertising and [CAM] is a small step in the right direction,” says Jen Soch, vice president and activation director of advanced TV at MediaVest.

In fact, MediaVest is one of the media buying agencies that's working on its own system of addressable advertising, and it claims to be ahead of Canoe.

Its system, also now in test, is capable of delivering ads to specific homes based on several demographics. Says Soch: “We’ve been doing addressable marketing tests, but household addressability, which is more in depth."

Local cable operators and interconnects have been delivering addressable ads for years, typically by splintering different messages to different neighborhoods based on demographic characteristics.

“What we do is generally work with national advertisers that are buying local markets,” says Andrew Capone, senior vice president of marketing and business development at NCC, a national spot cable sales firm. “Canoe is doing something a little bit different in the sense they’re using network inventory and enabling networks to make the inventory [addressable].”