Addressable TV
Hitting The Spot: Advertisers Will Target Specific Cable TV Viewers Soon
Laurie Burkitt, 09.29.09, 6:03 PM ET

Nearly 10 years ago, Scott Ferber, chief executive officer of TidalTV in Baltimore, tried to convince Comcast cable company that a 60-year-old woman shouldn't be watching the same commercials as an 18-year old man. While the argument was persuasive, the technology to deliver targeted advertising wasn’t there yet. Finally, Ferber’s vision is becoming a reality.

Since selling his last company, Advertising.com, to AOL for $435 million in 2004, Ferber has focused on perfecting software that uses individual data collected from set-top boxes and other viewer information, such as time, date and location, to show "the right ads in the right place at the right time," says he. And now GroupM, the investment arm of advertising holding group WPP Group, has decided to use it at the beginning of next year.

For WPP, which owns Ogilvy & Mather and Grey Advertising, among others, TidalTV’s service will help its agencies be among the first to send targeted advertising to specific consumer groups on TV, much as they do on the Internet. The advertising holding company is already ahead of its peers, as it plans to offer addressable ad services to clients with Dish Network satellite TV later this year. WPP is also an investor in Invidi and Visible World, two companies that compile personal data about viewers for cable companies. Now, with Tidal TV’s software, its advertisers can more efficiently send targeted ad messages--for diapers or computers, say--to certain groups of viewers.

Finally, the cable giants are starting to change. Cablevision currently customizes ad delivery in two New York boroughs (Brooklyn and the Bronx) based on income, gender--even home and pet ownership. Direct TV announced in June it will roll out addressable ads in 2011. Canoe, a venture group made up of Comcast, Time Warner Cable, Cox Communications, Cablevision Systems, Charter Communications and Brighthouse Networks, is pushing for a national infrastructure standard to make interactive and targeted ads easier to distribute.

Why change now? Cable outlets want to remain relevant. Viewers are flocking to the Internet and marketers are following them because ads there can be tracked and targeted. Some Internet users are even canceling their monthly cable subscriptions in favor of hooking their computers to their TV sets. Defectors to streaming video services such as Apple TV or Boxee haven't yet ballooned, but it's a big concern for the cable operators.

Cable companies are also looking for a way to cash in. They shell out big bucks to make the Web faster while Internet giants like Google and Microsoft rake in all the money, says Ryan Jamboretz, director of corporate development at GroupM. "Customers demand speed and cable doesn't make any money off the upgrades. This is a way for us to add value for them and their customers," he says.

Canoe Ventures spokeswoman Dana Runnells says there is no timeline set for major industry changes. The New York company faced an infrastructure setback with local and national cable operators this summer in its effort to launch a community addressable advertising product, but it expects to launch interactive advertising, enabling consumers to use a remote control to interact with commercials, in 2010.

Expect changes in targeted TV marketing to come faster now that some of the groundwork is set, says Ferber. "It's a lot like the ATM," he says. "Those machines have been around for 30 years, but it wasn't until this past decade that you saw them everywhere. It just takes time for people to change."