Sky Media attracts new money to TV with Sky AdSmart | Videonet
One-third of the advertising campaigns that Sky Media has run during the test-and-learn phase of the Sky AdSmart launch, which started in August, represent money that is new to television. That was perhaps the most important revelation from Jamie West, Director of AdSmart & Commercial Development at Sky Media (the sales arm of BSkyB), when he used Future TV Advertising Forum this week to reveal some of the results from trials of the linear addressable advertising initiative. He outlined the impact Sky AdSmart is having for regional advertising and revealed that a car dealership in Portsmouth sold 26 Ford Fiesta cars in eight days using the system, and sold double its anticipated figures by the end of its 30 day campaign.

The car dealership (Hendy Group) has already booked other campaigns. “We already have a long-term relationship that we are building,” West reported, as he told the London audience that Sky Media expects to take money from direct marketing, local press, local radio and online search and display budgets. Part of the reason is that his company can provide the same precision as online and direct marketing when it comes to segmenting households, giving them attributes and then enabling advertisers to build the audiences they want to target by including multiple attributes.

The system is now live in 6 million homes, a figure that is still growing and Sky AdSmart is available for use across all the Sky-owned entertainment channels (e.g. Sky 1 and Sky Living) with the exception of live sport and live news. Third-party owned channels will be added next year. West was less precise about when live sport and news will be included, saying only that it will be “at some point in the future”.

Sky Media ran the first external campaign of its test-and-learn phase on August 27 this year and has now run 50 campaigns. Advertisers can currently choose from a list of 90 household attributes that they want to address, one of which is region. West reported that advertisers have typically been running campaigns that combine 2-3 different attributes to create a target audience.

Two of the brands that have been using Sky AdSmart for regional targeting are NatWest bank and Ocado. Natwest has been swapping national UK advertising copy for more localized copy in Scotland where the Natwest brand is not used. Ocado, the online supermarket and home food delivery service, has been targeting audience segments they are likely to convert within chosen conurbations, providing an example of geographic and audience targeting combined.

Westfield, which operates major indoor shopping centres like the one next to the Queen Elizabeth Olympic Park in Stratford, East London, has also been running regional advertising with AdSmart.

Jamie West made it clear that Sky Media views AdSmart as on opportunity to tap into new advertising markets. “This is not about taking market share from Channel 4 and Channel 5 [two of the UK’s commercial broadcasters]. That would be a pretty low aspiration,” he asserted.

He then listed where he thinks advertising budget can be diverted from, as outlined above (e.g. online display, local press, etc.). When it comes to regional advertisers, he gave the examples of estate agents, car dealerships, financial practices and legal practices as part of a new TV advertising community, as witnessed in Portsmouth, one of the conurbations that you can specifically target using Sky AdSmart. “There is a real cross section of small and medium sized businesses in that area,” he pointed out.

Sky Media has a growing list of local advertisers booked for next year and West declared: “We are already growing the television market.”

Sky AdSmart is a system built with Cisco to enable addressable (or targeted) advertisements to be inserted dynamically into advertising spots as programmes air, and the fact that it is designed for linear TV makes it one of the most significant advertising projects in Europe today. Each Sky home is given a list of ‘attributes’ that are delivered to the Sky+ DVRs via satellite. Advertisements are then pushed to the DVRs via satellite along with campaign metadata like restrictions on where/when the advertisements can be shown and frequency caps, etc.

The set-top box then waits for a Sky AdSmart ‘event’, meaning a signal from an advertising spot that needs be filled with a DVR-stored and targeted ad that will replace/overlay the advertisement that is airing nationally in the original linear broadcast programme. The set-top box chooses which advertisement to insert, based on the campaign requirements and the attributes of the home. AdSmart activity is signaled to the BARB audience measurement service and it is also measured using SkyIQ set-top box tuning analytics.

Advertisers for the national campaign are not charged for audience segments that are switched to Sky AdSmart advertisements, of course. Advertisers that have paid for a targeted insertion to replace the national campaign (either in certain regions or for certain audience segments) are only charged for ads watched at normal speed and where 75% of the advertisement is watched. Jamie West contrasted this to what happens with online video advertising where he said advertisers are charged if one second or even one frame of the ad is seen.

There will be up to 2,000 advertisements available for a Sky AdSmart dynamic insertion and up to 200 of these in any household set-top box at the same time. Obviously the set-top box only receives ads that are considered relevant to a home. Two of the things that stand out about this system are the degree to which it relies on the STB (which performs ad decisioning about which advertisements should be inserted and when, and behaves like an ad server) and the use of satellite for just about everything (delivery of attributes, ads, advertising metadata and even things like campaign frequency performance updates) rather than IP networks.

West said that in the middle of next year Sky Media will extend the number of attributes that can be assigned to households. New metrics will include things like propensity to purchase and propensity to own. The ambition is that by the end of next year the company can be even more flexible, inviting advertisers to provide their own data sets to match against the Sky Media database. And if advertisers do not know who their target audience is, the company will be able to help them find it, West added.

Responding to audience questions at the London conference, West said Sky Media has not had time to study consumer acceptance of the linear dynamic ad targeting yet. He pointed to the addressable advertising trial run by Comcast Spotlight in Baltimore [around 2009-10] where there was a 32% reduction in channel tune away at ad breaks when people were given more relevant advertising as evidence that consumers respond well to this kind of technology. He also noted that AdSmart enables frequency capping for the first time on television, so could mean we see less of the same advertisement (you can tell the STB to only show the same ad creative a certain number of times).

West noted that of all the investments BSkyB has made in television over the years, Sky AdSmart represents the first significant investment to enhance the advertising process. “This is all about making TV more relevant to more brands,” he declared.