Small steps only for targeted advertising

Addressable advertising is unlikely to make a dramatic breakthrough in markets like the UK, but will more likely be characterized by small steps, with potentially 8% of TV advertising revenue being accounted for by some form of targeted advertising by 2016, IP&TV World Forum attendees were told yesterday.

Nick Adams, head of digital development at MindShare UK, speaking on a panel session in the Advertising and Sponsorship stream, said that UK pay TV broadcaster Sky’s AdSmart technology, which creates household ‘clusters’ to which adverts may be targeted, will deliver about eight million homes in which Sky will be able to pick out different demographics and behaviours in order to target advertising. However, it will not be possible to roll out addressable advertising in one go, said Adams. “In 2013 it is possible that we will see occasional ad spots devoted to addressable ads,” he said, adding that this is likely to be limited to linear TV. “It’s definitely coming in the UK but it’s not going to be here tomorrow,” he said.  Adams said that addressable ads were likely to appeal initially to direct marketing organizations rather than mass market brands. He said he did not believe that either Sky or cable operator Virgin Media in the UK would be able to deliver a huge premium for addressable slots in the near term.

He said that one task would be for broadcasters to win over media agencies and advertisers. Existing buying practices were tried and trusted, and some agencies had different perspectives on how valuable targeted advertising was. Paul Wright, chief digital officer of OMD, speaking on the same panel, agreed that “addressable advertising is not easy” and would only be rolled out slowly. “I think that’s a good thing, because we need to see what works. Addressable advertising is not for everybody,” he said.

Wright said pay TV platforms had scale and had the potential to deliver addressable advertising, though it was yet to be determined who would sell the slots.