After months of negotiations, Los Angeles interconnect Adlink two weeks ago agreed to license a pair of proven audience-segmentation products to the New York Interconnect.
And executives with Adlink — which developed the Adtag and Adcopy products in 1995 — said they aim to talk with other major interconnects about similar arrangements.
The Adtag technology allows Adlink to run the same commercial throughout the Los Angeles market, but customized with different dealer or retailer tags for some 70 geographic areas within the DMA. Adcopy allows a given client to run different spots simultaneously in specific subsections of the DMA.
To illustrate Adcopy's targeting ability, Adlink CEO Charlie Thurston recently noted that in a market that uses the technology, young professionals in one neighborhood might see a spot for, say, the Dodge Neon. Meanwhile, families in another area of the same DMA would view a commercial for the Dodge Caravan minivan.
With the economy slumping — and an ad-sales battle raging between cable systems and broadcast-TV stations — increasing one's targeting ability has become particularly important, the companies indicated.
"Our licensing agreement with the New York Interconnect will hopefully create momentum for more advertisers to take advantage of these products in the No. 1 and No. 2 markets," said Adlink executive vice president and general manager Hank Oster.
Adlink sells inventory on 44 cable networks in Los Angeles via systems that reach nearly 3.5 million subscribers, while its New York counterpart sells time on 31 networks in 3.6 million cable homes.
The licensing agreement entails a "minimal" fee, rather than a percentage of generated revenues, and covers "no definite period," Adlink senior vice president of marketing and communications Vicki Lins said.
New York Interconnect senior vice president and general manager Eglon Simons declined to disclose specific terms of the agreement.
"This is not a big revenue generator at all for Adlink," said Lins, though she said it would discuss rolling out the tools with other interconnects. "It's more a partnership. We don't compete [with each other]; we all compete against broadcast."
Adlink generated about $10 million in business from Adtag and Adcopy in 1999, Lins said. Since then, revenues from the two technologies have been "fairly steady, up a bit," she said.
Such automakers as General Motors Corp. and its Chevrolet division have been the heaviest Adtag and Adcopy users, according to Adlink, followed by beverage and packaged-goods clients.
Adcopy allows GM to support multiple vehicles simultaneously, providing extended continuity and increased frequency for each brand, said Dennis Donlin, president of GM PlanWorks, which handles media-buying chores for the auto giant. "We are encouraged to have this option available in the New York market."
Simons, who said last fall that his group was negotiating for the licensing arrangement, noted that Adcopy and Adtag would be "extremely effective for our automotive and fast-food clients, as well as any advertisers with multiple dealers or products to offer." The A&P supermarket chain could be another prospect, since it also operates Food Emporium and Waldbaum's stores in different areas, he added.
The New York Interconnect has been promoting the tools on its Web site, Simons said, and has already fielded some inquiries from automotive clients.