Local advertising represents an opportunity of “a couple hundred to $400 million” for DirecTV, chairman and CEO Mike White said at last week’s investor day conference (see DirecTV Unveils 2011 Strategy).
Over the next two years, the satellite TV operator plans to be able to sell targeted local ads on 50 channels in 50 cities.
“While we do a great job on ad sales, we’ve historically not had a capability to do local advertising,” White said. Cable companies get around $5 per sub per month for advertising, whereas DirecTV gets around $2 per sub per month, he noted.
DirecTV had previously said it would launch local ads in January 2011, using ad-insertion technology from Invidi Technologies (see DirecTV Sets Stage For Local, Targeted Ads). As described by the companies, 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 different criteria which ad to serve in a given time slot.
White outlined two other areaa of growth opportunity: transactional VOD, with its “connected home” strategy to hook up users’ set-tops to the Internet; and selling video to commercial customers.
Note that on local ads, rival Dish Network has worked closely with Google to sell local ad inventory across 100-plus networks — and that DirecTV has dipped its toe into the water with Google for 11 networks (see Google To Sell Some Ads For DirecTV).