Marketers have always relied on television ads to carve a foothold into the national consciousness, through annoying repetition.
What product effortlessly erases ring-around-the-collar? What does HeadOn do when applied directly to the forehead? Your chocolate plus my peanut butter yields which tasty treat?
But ads inserted into television programming face a confusing future. More than 13 million households now use digital video recorders, according to analysts at Forrester Research Inc., a device which make clusters of commercials much easier to skip. Meanwhile, on the Internet, consumers are actually choosing to watch ads they find entertaining
Among February's most popular videos on the video-sharing site YouTube are ads for Coke and Emerald Nuts, viewed voluntarily more than a million times each.
One new possibility advertisers are experimenting with is a more targeted and relevant TV spot. Imagine being pitched for a new BMW three months before the lease on your current Bimmer expires, or slugger David Ortiz filling the screen midway through a neck-and-neck Sox game, suggesting that a round of Dunkin' Donuts iced coffees might help the home team pull ahead.
Technology firms such as SeaChange International Inc. in Acton and Visible World in New York are enabling that sort of "message optimization," as Visible World chief executive Seth Haberman has dubbed it. The hope is that ads geared to specific groups of viewers or linked to current events (like the score of a game or the day's weather) won't be ignored.
Wendy's International Inc. is among the advertisers using the technology. Last fall, in two test markets, if the weather was above 60 degrees, the fast-food chain promoted its milkshakes, and if it dropped below 60, the company's spots highlighted chili instead.
"You can imagine that on a snowy day, an airline might want to emphasize that it has flights leaving every half-hour for the Bahamas," says Terri Swartz, director of advanced advertising at SeaChange, which sells ad-insertion technology to broadcasters and cable providers. Another possibility, according to Swartz, is an automaker dipping into the same databases direct-mail marketers use, delivering ads for sports cars to homes without children and ads for SUVs or minivans to households with kids.
One Princeton, N.J., company, Invidi Technologies Corp., even offers cable and satellite companies technology it says can tell whether a man or woman is in front of the television and deliver gender-specific ads.
According to the company, men and women use a remote control differently, and by paying attention to the way the buttons are clicked, it can guess who is wielding the control with 95 percent accuracy. (Apparently, 5 percent of women must confuse it with hyperactive clicking that suggests the presence of a Y chromosome.)
"If I watch a lot of Lifetime and Oxygen, what Invidi will do is queue an Old Spice ad into the advertising breaks on Oxygen and Lifetime, because it concludes that I'm a guy," explains Adam Gerber, a vice president at the Cambridge video start-up Brightcove Inc. who formerly worked for MediaVest, a media planning-and-buying firm.
Normally, based on aggregate viewing data, advertisers might assume that anyone watching those networks is a woman.
Swartz says that one aspect of targeted advertising that consumers might appreciate is seeing fewer irrelevant ads. "Consumers think, 'Why can't I set a parameter so I never see another Viagra commercial?' " she says. "They want to be able to filter out the annoying products that they don't need to hear about."
Over time, that could happen if more advertisers adopt targeting. But TV will remain, at least for the foreseeable future, a medium that can deliver big audiences, especially for events like last month's Super Bowl or next Sunday's Academy Awards. And there will always be advertisers who want to use those events to communicate with a broad swath of the public.
For more common, day-to-day programming, an important trend is reducing the number of ads in a commercial break while generating as much (or more) revenue. "People aren't going to sit through five-minute pods of commercials for very much longer," says Gerber. "But if broadcasters reduce the number of ads in that pod, then their revenue goes down. Delivering better targetability is one way to increase the value of each ad unit as you reduce the clutter."
Viewers may not always notice that they're watching an ad that was selected especially for them, perhaps based on the demographics of their ZIP code or their gender. But sometimes, an ad may reference the neighborhood where they live or be germane to the show that surrounds it.
In 2004, United offered shout-outs to specific neighborhoods around Chicago, like Des Plaines, to advertise its low-fare division, and a possibility for financial services firms involves running different ads on CNBC based on what's happening on Wall Street.
"My belief is that noticing that an ad is targeted to you is important, as a means for shaping the behavior of people who skip ads," says Haberman at Visible World. "But people who don't skip ads don't have to notice they're being targeted. They just have to respond."
But until the targeters can trot out data that show how much more effective their approach is, and making the case that it can effectively combat ad-skipping, ad dollars may continue to migrate elsewhere.
"Marketers are turning to product placement and producing their own branded content," says Forrester advertising analyst Peter Kim. "And they're shifting their dollars into other channels, like online."
That means the pressure on TV advertisers, broadcasters, and cable and satellite providers isn't going away anytime soon. Perhaps they could use a nice, therapeutic dose of HeadOn?
Scott Kirsner, The Boston Globe. February 18, 2007
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