Homing In On Viewers - Chris Ellery reports in Marketing Magazine Feb 10

LONDON - Will targeted TV ads be met with suspicion by consumers or prove highly effective?
The recent backlash against Google's Buzz social net­work has highlighted a lingering suspicion among consumers about the ways companies use their data to target them with advertising. Yet, this has not stopped TV broad­casters from exploring the possibility of tailoring ads to particular individuals.
Sky recently rolled out AdSmart, which offers brands the chance to tar­get spec­ific viewers in this way. The launch is being phased and, currently, the system applies only to program­mes on Sky Player, the broadcaster's video-on-demand service. Ads appear in the form of pre-rolls and are chosen according to subscriber data. Next year it will be rolled out to linear TV.
This means that advertisers will be able to target ads shown on TV. For example, a car marque could buy an ad slot and ensure that a cons­um­er with a TV switched to that chan­nel was shown a model relevant to their household demo­graphic. The service will apply on channels sold by Sky Me­dia; deals for broadcasters such as ITV and Channel 4 are not yet in place.
This does raise the issue of whether it will engender a consumer backlash. The likelihood of this occurring, how­ever, is very small. Ahead of the VOD launch, Sky emailed its subscrib­ers to tell them how it would use the data and offered them the opportunity to opt out. A key difference here with the approach used by Google is that the targeting is based on user inform­ation already held by Sky and will not be gathered via behavioural tracking, which many view as an invasion of their privacy.

Localised focus
Tess Alps, chief executive of commer­cial TV's marketing trade body Think­box, points out that multichannel TV ad­vertising is already targeted to some degree. She says AdSmart will make the ads more ‘addressable'. For exam­ple, advertisers could use voiceovers in different accents, depending on the region in which the ad is broadcast, or retail chains could include inform­ation on local stores.
However, questions remain over how Sky's system can be implemented. The biggest is how it will be sold to ag­en­cies and brands. So far, the indus­try has not been approached. ‘We're a long way from having those convers­ations,' says Matt Hunting­ford, broad­cast ass­ociate director at media agency Carat. He predicts that Sky will initially seek to bring in a few big-name brands to test AdSmart and build case studies.

Price differential
Nigel Walley, managing director of digital agency Decipher, says Sky will need to be careful about how it sells targeted advertising, as allowing brands to rem­ove wastage may lead to a decline in TV budgets. That remains an extreme outcome, and one the broadcaster will surely guard against.
Walley believes Sky may sell targ­eted advertising as an added-value service on top of existing ad buys. ‘Realistically, it's going to be so hard to price this that it may be something that Sky uses to raise its share from agencies,' he says. ‘It will become part of its trading with agencies.'
Another TV industry source argues that it will be sold as an ‘added func­tion­ality, like the red button'.
Another potential problem is that a targeted-ad service will come with hidden costs for advertisers, such as the expense involved in prep­aring multiple creative executions. More­over, marketing teams will need to align their TV activity and spend - for example, a car company would need to be running campaigns for several mod­els at the same time to target different demographics in one ad slot.
Huntingford believes the service will appeal to few brands and that it will be ‘more relevant to big advertis­ers that have lots of discrete target aud­iences in their portfolio'. Not many advertisers are set up to plan this sort of campaign and deal with the feed­back data. ‘It will only be a small part of the market for some time,' he adds.
Targeted ads are likely to be a low on the list of prior­ities for broad­casters such as ITV and Channel 4. Unlike Sky, Virgin Media or BT Vis­ion, neither company has its own platform or the attendant subscriber data with which to tar­get ads. As a result, they would have to sign deals with these platforms to use their targ­eting services.
Until there is a clearer picture of how great the demand might be for targeted ads, they will remain the exception rather than the rule.

To see original article Click Here