DirecTV Will Offer Targeted Ads in 2011
DirecTV Group Inc. is preparing a new service that allows advertisers to reach viewers based on their locations, a significant change for the satellite-television business.Satellite companies have so far been constrained in their ability to target specific regions -- DirecTV, for example, has mainly east and west broadcast streams.
DirecTV will use software from startup Invidi Technologies to deliver the targeted ads, beginning in 2011. The software can home in on the geographic region of viewers by picking up information from set-top boxes, said Michael Kubin, executive vice president of Invidi Technologies.
"We know exactly where a viewer is located, and to advertisers who want to avoid waste, that makes all the difference," Mr. Kubin said.
The new service will allow DirecTV, which has 18 million subscribers, "to compete for a large slice of the TV budget, which is local advertising," said Tracey Scheppach, senior vice president and video-innovations director at Publicis Groupe's Starcom Worldwide.
Advertisers have been clamoring for more precision and rival cable operators have ramped up their own local ad offerings. At the same time, lawmakers are growing increasingly concerned about the privacy implications of ad-targeting technologies. On Thursday, Congress plans to hold a joint subcommittee hearing on privacy and digital advertising. "DirecTV stands ready to work with Congress on addressing any privacy concerns they may have with respect to consumers," a DirecTV spokesman said.
DirecTV is entering local advertising as the segment reels from the recession. Local U.S. ad spending will fall to $94.4 billion in 2009 from $111.2 billion in 2008, according to forecasts from research firm eMarketer.
Still, as growth at DirecTV and its major cable rivals slows, the operators are becoming more aggressive in searching for new revenue streams, said Thomas Eagan, an analyst at Collins Stewart.
The country's largest cable operators have identified targeted-TV advertising, including by geography, as a major future engine of growth.
Canoe Ventures LLC, a joint venture between Com cast Corp., Time Warner Cable Inc., Cox Communications, Cablevision Systems Corp. and Brighthouse Communications, plans to launch a service that allows advertisers to select geographies.
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DirecTV Sets Stage For Local, Targeted Ads
Satellite Service Inks Deal With Invidi For Set-Top Ad-Insertion Technology
DirecTV has signed a deal to use ad-insertion technology from Invidi Technologies that will let the satellite TV operator for the first time deliver different local ad spots to individual subscriber households.Currently, DirecTV is working to integrate the Invidi software with its digital video recorder receivers and is aiming to launch the local ad capability in January 2011, said Bob Riordan, DirecTV senior vice president of national advertising and sales.
"It's a tremendous engineering challenge and we have every confidence that this will happen. But there's no short solution to this," he said. "You can't be half-pregnant with this technology."
Dish Network announced a similar agreement with Invidi last fall. The two satellite companies together represent some 31 million set-top boxes, according to Invidi executive vice president Michael Kubin. "We hope there will be a standard everybody works off of, which will make it easier for one advertiser to work across all distributors," he said.
Invidi also has been working in an addressable-ad trial with Comcast, in the MSO's Baltimore market. "Our technology is intended to be platform-agnostic," Kubin said. "We've been speaking with everyone -- satellite, telcos and cable MSOs -- since the beginning."
Today DirecTV can only sell advertising across its national footprint. Using Invidi's technology, the satellite company would be able to s erve individual TV commercials dynamically by region, ZIP code, designated market area (DMA) - or even by subdivision, neighborhood, political district, street or individual household.
"At this point we're a national advertising play," Riordan said. "This lets us for the first time deliver a local advertising solution."
The various TV spots, sold in the local inventory available to DirecTV, will be delivered via satellite to subscribers' DVRs. The Invidi software then determines based on various factors which ad to serve in a given time slot.
Riordan said that by the time DirecTV launches local advertising, more than half of the operator's subscribers will have DVRs in their home, representing somewhere around 20 million boxes.
As for privacy concerns, DirecTV is "highly sensitive to the privacy of our subscribers," Riordan said, noting that targeted ads would be delivered based on anonymized data. "This is a noninvasive platform," he said.
DirecTV plans to overlay geographic information from subscriber se t-top boxes with "reputable" third-party demographic data, according to Riordan, to allow marketers to target ads to specific demographic profiles. "It will take such waste out of advertising," he said. "I'll be getting a Ford commercial, but a household with a 21-year-old may be getting a Jetta commercial."
Initially, the satellite TV operator expects to offer 25% or less of its available i nventory for local, targeted ads, Riordan said. Other details of the business model are "also under discussion," he said, such as whether different advertisers would be able to buy the same avail in different markets.
Invidi, founded in 2000, has received funding from ad agency GroupM, which is a subsidiary of WPP, as well as Motorola, Menlo Ventures, InterWest Partners and EnerTech Capital.
"Individual household advertising solutions have for decades been the holy grail of marketers and media professionals," GroupM CEO Irwin Gotlieb said in a state ment. "We hope this is an early step in the establishment of a common ecosystem f or the television industry's delivery of advanced advertising products."
On the cable front, Canoe Ventures - a consortium of the U.S.'s six biggest MSOs - is working toward delivering Community Addressable Messaging, a service that initially would allow advertisers to show a different version of an ad to viewers in high-income areas. Rainbow Media's AMC is currently testing that service with Canoe.
Separately, Cablevision Systems this summer is expanding its addressable-advertising capabilities to deliver TV spots based on an individual subscriber's demographic data to some 500,000 households across the New York metro area, using technology from Visible World.
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DirecTV to Serve Up Targeted Ads
The agreement follows a similar arrangement that was hashed out between the addressable-advertising software company and DirecTV rival DISH Network. That deal was announced in November 2008.
Once the Invidi software goes online––DirecTV will upload the program to its subscribers’ digital set-top boxes––the operator will be able to insert local advertising, allowing marketers to target a sedimentary band of targets, ranging from DMA to zip-plus-four to individual households.
Under the new targeting system, DirecTV will push local ads in advance of their airdates, where they will be stored at the premises level (i.e., in the set-top box). From there, th e Invidi software will cue up the spots from the set-top hard drive. In other words, rather than viewing a scheduled national s pot in the two-minute local window, DirecTV subs will see relevant ads targeted specifically to certain consumer behaviors/demographic contours, depending on what that particular advertiser is looking to achieve with its campaign.
DirecTV will begin serving up the Invidi software to “friendlies” in early 2010, with an eye toward full deployment to its 18.1 million subscribers by 2011. “It won’t be a matter of just flipping a switch, but once they start lighting the boxes up, the progression will be rapid,” said Michael Kubin, executive vp, Invidi.
In the early stages of the service, DirecTV will offer a quarter of its available inventory for targeted ads. Schedules and deliveries will be verified by Invidi’s ADN (ad delivery notification) software.
“Advertisers hate waste, and what we offer marks a significant change in the ability to get the right spots in front of the right people,” Kubin said. “Our spot optimization allows advertisers to carve up the audience into segments, so they can hit different demos in the same break. A targeted audience is exponentially more valuable than the sort of deliveries you can achieve with a shotgun approach.”
Founded in 2000, Invidi is backed by a number of investors, including GroupM, Motorola and Menlo Ventures.
“Individual household advertising solutions have for decades been the holy grail of marketers and media professionals,” said GroupM global CEO Irwin Gotlieb. “We hope this is an early step in the establishment of a common ecosystem for the television industry’s delivery of advanced advertising products.”
The deal comes as the cable industry readies its own advanced-advertising cooperative, Canoe Ventures. While AMC kicks the tires on Canoe, parent company––and Canoe investor––Cablevision is expanding its own targeting capabilities this summer. After an 18-month trial reaching 100,000 subscriber households, Cablevision is opening the aperture, prepping a targeted-ad push that will include 500,000 households across the New York metro area.
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DirecTV Taps Invidi For Local Ads
Will push localized ads to DVR storage
Satellite operator DirecTV has signed a deal with addressable advertising firm Invidi Technologies to supply it with software that will allow it to deliver local advertising by playing pre-recorded ads off subscribers’ digital video recorder (DVR) set-tops.
Invidi is the first technology supplier that DirecTV has formally announced for the local advertising initiative, which won’t launch until January 2011. Geographically-targeted ads would be “pushed” in advance to be stored on subscribers’ set-tops, and the Invidi software would cue up the localized ads to be played off the hard drive in place of a national spot.
“It is an extensive undertaking, and we’re in the very early stages,” says Bob Riordan, SVP of advertising sales for DirecTV.
Invidi, whose investors include advertising firm Group M and Motorola, struck a similar deal with Dish Network back in November for its Advatar software. Interactive TV firm NDS, which supplies conditional-access and guide technology to DirecTV, has also proposed using DVR storage to deliver targeted advertising. And in 2007, News Corp. applied for a U.S. patent for a process by which an MPEG-2 compressed program would be broken up into a series of segmented files that separates program content from commercials and promos. Fresh commercials could then be delivered to the DVR on a “push” basis, through either broadcast or broadband delivery, and new software would be smart enough to record them and then “splice” them into the program when a viewe r watches a time-shifted show.
DirecTV has begun offering some local avails on regional sports networks, in partnership with cable entities NCC and Comcast Spotlight, but that is through traditional linear satellite feeds. The new system, which could eventually also use broadband connections to deliver local advertising, would be a major improvement that could be available across DirecTV’s broader base of channels.
“It gives us the ability to get into the local marketplace,” says Riordan. “We’ve been a national platform, and we’ve done very well, but that’s kind of restricted our growth somewhat. Now we can get out in the marketplace at a local level.”
Invidi, which was founded in 2000, has working deployments of addressable advertising with multichannel operators today, says EVP Michael Kubin, but it hasn’t been able to disclose who they are.
When it was pointed out that NDS also has such a targeted-ad system, and that News Corp. has also applied for a U.S. patent relating to delivering targeted ads from a DVR, Kubin agreed that intellectual property was a big issue. But he says Invidi is only using technology it d eveloped, and hasn’t licensed any outside [IP]. He says he is also sure that Dish and DirecTV have done their homework on the patent front.
“There’s a broad portfolio of IP that covers this, and the reason these deployments take so long is everyone is really careful to make sure the IP is in place,” he says.
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Satellite television distributor DirecTV Group has struck a deal with Invidi Technologies to deliver addressable advertising starting in 2011.
DirecTV has been selling national advertising for some time. The company says this is an effort that initially will sell advertising locally.
Like many addressable advertising providers, Invidi looks to store advertising that is appropriate to specific households or geographic locations on TV viewers' set-top boxes, then send out those commercial messages when needed.
Invidi struck a similar deal with Dish Network back in November. Invidi investors include media agency Group M and electronics manufacturer Motorola.
Many addressable initiatives are under way -- including one that Invidi has been testing with Comcast's Baltimore cable system.
One big effort that is beyond the testing phase is with Cablevision Systems and addressable advertising technology company Visible World, which has Group M's parent company, WPP Group, as an investor. After a year of testing, the system is now deployed in some half-million Cablevision households. The target is to be in 1 million homes by the end of the year.
Overall, Cablevision has some 2.8 million digital TV subscribers that it intends to connect with addressable ad technology. Tara Walpert Levy, president of Visible World, says a number of advertisers have bought in so far, including entertainment and consumer electronics marketers.
