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Marketers begin to dabble in addressable TV ad programs

Marketers are beginning to test addressable advertising with cable TV and DVR providers to serve relevant ads in consumers’ homes. However, some industry experts say TV-based addressable ads will still not mature as a service for a few years.

Late last year, Long Island, NY-based telecom company Cablevision deployed an addressable ad offering to nearly all of its 3 million digital subscribers in the New York metropolitan area.

The platform is running more than a dozen campaigns for national brands building on previous trial runs targeting audiences of 100,000 and 500,000 viewers. Disney, the U.S. Army and Toys “R” Us are among the advertisers participating in the test, according to an industry source. The platform serves ads based on data about viewers’ income, education levels, language and other information. TiVo also includes targeted ads based on viewing habits.

“It’s no different than what a direct mail house does,” said David Kline, president and COO of Rainbow Advertising Sales Corp. (RASCO), the advertising sales arm of Cablevision. “The big differentiator here is that TV is one of the most powerful ways to advertise, so when you combine the power of TV with the power of direct marketing,
it’s pretty powerful.”

Cox Communications, Dish Network and Time Warner all have addressable advertising projects in the works, according to an industry consultant. Cablevision’s service is using technology from targeted advertising startup Visible World. Kline said the company will soon experiment with more interactivity in the campaigns, so a viewer can click to request a free sample or demo DVD. While some cable and DVR providers are predicting interactive TV-based ads will take off this year, other industry experts don’t believe the industry is ready.

“The cable companies will have to agree on a national currency for audience evaluation, like what Nielsen’s audience data provides in order to interest national buyers, versus those that buy on a local basis,” said David Cooperstein, VP and practice leader at Forrester Research, who expects a national rollout to take another three to five years.

DirecTV is also planning to launch a major addressable advertising initiative in the third quarter of 2011. It will share the names and addresses of subscribers with database marketing firms Experian and Acxiom to target ads at the household level.

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