Pan-European advertisers may soon broadcast different commercials to niche audiences all watching the same show.
ACTV, a New York-based software manufacturer specializing in digital TV applications, teamed with Claritas Europe to introduce the targeted advertising service.
“What we do is sell software that can be loaded into digital boxes that will automatically pick out a commercial targeted at selected audiences,” said Greg Lovett, ACTV senior vice president for Europe.
Thus a family with four children in one house and a bachelor in the house next door can watch the same show yet see different commercials.
“It makes no sense to sell diapers to the bachelor or a sports car to a large family because they won't buy the product,” he said, “but targeting spots to selected audiences gives the advertiser more bang for the buck and puts money into the digital broadcaster's pocket from the word go.”
Lovett noted that the software allows for the use of standard TV spots and thus entails no additional production expense. Claritas provides the data that make niche targeting possible.
“We have consumer data across Europe,” said Donna Barradale, Claritas' business development director, “and at all different levels. Take the UK. We know a minimum something about every household.
“We have divided the country into 52 population clusters using PRiZM, our segmentation system. That's at the basic level. But we also have data on 75 percent of the population from questionnaires and surveys.
“We ask about age, income, occupation, credit cards, children, cars and what brands they buy. In the UK half of our information is current. And we distribute surveys and questionnaires across Europe as well.”
Claritas data are provided to broadcasters that license ACTV software. A complete business plan, Barradale said, has not been developed, but it could involve payments of license fees for the Claritas data.
The key element in the cooperation is the growth of digital TV in Europe. Barradale claims that a third of the UK's population already has digital TV and that the number is growing.
Lovett said most European digital TV is still delivered via satellite, but he said digital cable is growing rapidly. The market for his product is the 10 million to 12 million digital satellite or cable subscribers, he said.
“France has several million satellite digital TV subscribers and a couple of hundred thousand on cable,” Lovett said. “The UK has at least 5 million on BskyB. Spain has close to a million on their digital platforms.
“Premiere Germany has 2 million digital users with a box, although they are not interactive. UPC, a Liberty Media subsidiary, is huge in Germany, the largest in Europe and they will have to upgrade digital services.”
Lovett conceded he has a major selling job ahead to convince cable and satellite operators to buy his software, but he said interest in his product is rising.
“We don't sell advertising time, but broadcasters can make money with targeted ads from the minute they go on the air,” he said.
“Look, broadcasters who charge $10,000 for an untargeted ad for diapers that are wasted on bachelors can ask for $8,000 for a targeted ad and everybody wins,” he added. “They get $16,000 and the advertiser pays only $8,000.”