Although some observers estimate programmatic TV advertising will be a $17 billion industry by 2019, we may be getting ahead of ourselves a bit. Consider that only about 42% of cable homes are even one-way addressable at this point, allowing cable operators to send targeted messages to select demos. While Time Warner’s Full Service Network of the ’90s promised two-way TV, less than half the homes in America are even one-way addressable now. Why? Because fancy cable boxes command fancy prices, and it hasn’t been cost effective.
So, while we wait for programmatic TV to become a big deal, we do take note of interesting efforts to take cable advertising beyond the local/national ad buy straightjacket it has been in.
I spoke this week to Kristin Dolan, former COO of the powerhouse cable operator Cablevision, who together with partner Ben Tatta, Cablevision’s former media sales president, have founded a new company — 605. The name comes from the original code name, Dataco Venture, with the initials DCV, which are Roman numerals for 605.
This is an audience measurement and analytics operation that was formed through the acquisition of Analytics Media Group (AMG), which helped President Obama's team target its ad messages in both of his presidential campaigns. Since the $9.8 billion sale of the cable giant to the Altice Group, Dolan Family Ventures has been investing in select properties. Other AMG clients include Uber and Walmart.
“This is an opportunity to make cable ads more relevant,” Dolan commented, adding that most cable advertising is limited to selectivity based on age and gender. Through a select use of detailed census data, info from VOD or DVR usage, and Web use, 605 promises a much more targeted ad opportunity. But not wanting to compete with its clients, 605 is not a seller of media. It does work with media companies to help them target tune-in spots better.
The Web site says: “605 introduces data and analytics to make planning less of an art and more of a science. We use models to identify targets for your product, service or cause. We use data from tens of millions of TV set-top boxes and online ad networks to anonymously match your most promising targets with their actual viewing habits to find the best way to reach them. We are constantly analyzing our data and enhancing our models, matching, and targeting to ensure you always have the best plan.”
Dolan mentions another company, Invidi, which has been around since 2000 but only recently launched a technology called satellite switching, which uses cheaper low-orbit satellites and available transponders to switch out broadcast TV ads, based on key audience segments. In a November interview with Beet.TV, Invidi CEO Dave Downey said the technology could introduce ad addressability to as many as 30 million homes in the U.S. But Invidi is focused now mostly on the international market, where satellite TV has much higher penetration than in the U.S.
I covered media on a quotidian basis in the ’80s and ’90s and, back then, utopian claims for what two-way TV could accomplish seemed to be issued on a daily basis. Two different experiments from Time Warner proved it was possible, the 1990s' Full Service Network and the much earlier 1980s' Qube system in Columbus, Ohio. But in each case, the experiments fell apart because the hardware was way too expensive — in the case of FSN, it was more than $1,000 for the two-way box. Try to amortize that over millions of cable customers.
Back then, the imperious Time Warner chairman Gerald Levin stated that he would “stake his career” on the success of the FSN. He’s long gone now, and what we see happening these days are much more practical and affordable ways to make cable advertising better.