Are You Being Served? TV targeting joins the digital age

Although later than scheduled British Sky Broadcasting felt sufficiently confident to announce Sky AdSmart to the City recently.

AdSmart will deliver a specific commercial, within usual live broadcast streams, to a carefully targeted household based on the information provided by Sky Customers who have volunteered to share their personal data.

The service will be available across 8 Sky Channels (but not Sky News) and starts testing later this year  with 30-50 guinea pig brands with a view to launch fully in 2014.

Essentially Sky is introducing niche targeting to TV; minimising wastage and making campaigns more efficient in terms of reaching an absolute audience.

In fact the term ‘target audience’ seems woefully inadequate on reading Sky’s description of what it describes as ‘segmentation’;

‘Sky AdSmart allows precisely targeted TV buying, by combining a unique set of attributes to match the desired customer profile

Reading down the list of possible attributes it is difficult not to be impressed by the numbers;

16 Regions, 15 Cities
13 types - based on financial need, behavioural influence & preferences
15 Experian Mosaic segments of demograph and lifestyle including lifestage and age of kids
7 tiered predictor of disposable income with partners Experian

Regionality alone creates opportunities that will significantly change the way that we can plan and buy TV.

Sky estimates that the regional TV market is currently worth £800million and is dominated by ITV and, to a lesser extent, Channel 4 & Five. The ability to target large metropolitan areas suggests that TV will compete with regional Press, Cinema and Outdoor budgets too.

There are numerous product groups that are not on TV because it is too ‘mass market’.

Financial products such as Asset Management have always been the domain of Financial Press and Outdoor but could more effectively be reached through AdSmart in future. Advertising for Mortgages, Insurance and Savings can be served to the people who are most likely to purchase the product depending of their lifestage and income.

Luxury brands - from high performance cars to high fashion- steer clear of TV because it is too broad and ‘downmarket’ but ads can now be served to their more elite customers in their favourite programmes.

Brands may benefit by using their whole product range and serving a different ad to varying households. Sky uses Ford as an example of where lifestage may dictate whether an ad for a Fiesta or an SUV is served.

Most optimum use may be as an addition to a broader campaign, particularly where a secondary and more elusive audience is the target.

Of course niche targeting comes at a price. Sky is likely to trade a cost per impression, which will be at a premium to usual pricing. This move in itself could bring welcome change to the way TV airtime is traded. Advertisers are keener than ever to understand which half of their advertising works & AdSmart will have to prove its worth in terms of ROI.

The whole point of TV for some advertisers has always been its ability to reach a mass audience- not necessarily a niche one. So a fast food brand may have a buying audience of adults 1634 for example, but the target is ‘everyone’. FMCG brands use TV across the board to sell product to the whole population. Niche targeting does not appeal to everyone; wastage to some brands is additional value to others.

Once the Digital Switchover was complete many of the previous constraints on TV were removed. The technology behind AdSmart relies on a hard drive in the Sky HD Box.

Hence, Sky is not alone in driving more targeted TV ad serving.  YouView (jointly owned by the BBC, ITV & Channel 4) and Virgin Media are looking to create similar opportunities. Channel 4 are already using their database of 6 million registered users of 4OD to serve specifically targeted pre-rolls and this is common in the US with TiVo.

Sky is very much pioneering in terms of advertising in the live broadcast stream though and, should testing be successful, all of their competition will follow suit.

As advertiser insight has increased with the wider use of data TV has fallen short of the mark in terms of targeting. AdSmart will enable TV advertising to compete with the kind of relevant and personalised advertising that has fuelled the growth in Online spend in recent years.