DirecTV, NBCU Advance on The Ad Front

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DirecTV and NBC Universal last week took separate steps toward improving the odds that the right TV ads will get in front of the right viewers.

The satellite-TV operator by 2011 is aiming to deliver locally targeted spots — even down to individual subscribers, based on demographic data — while NBCU is hooking up with Microsoft to sell select inventory across its cable and broadcast networks based on viewing metrics derived from set-top data later this year.

Meanwhile, cable operators' designs on tapping addressable ads suffered a setback, as Canoe Ventures said it would abandon its first attempt to deliver zone-targeted spots (see separate story).

DirecTV will 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 serve 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 set-top boxes with “reputable” third-party demographic data, according to Riordan, to allow marketers to target ads to specific demographic profiles.

Initially, the satellite TV operator expects to offer 25% or less of its available inventory 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.

NBCU, for its part, will sell national and local advertising inventory for its broadcast and cable networks through Microsoft's Admira marketplace. Terms of the deal were not disclosed. NBCU said it will make select inventory from both its national broadcast and cable networks available for the alliance, which is set to launch in the fourth quarter of 2009.

The programmer expects to deploy Microsoft's Admira to provide ad agencies planning tools for “data-driven targeting” and segmenting of specific audiences across its broadcast and cable television networks. Meanwhile, for small and midsize clients, Admira will enable automated planning, buying, posting and billing across many of NBCU's national broadcast and local TV properties, the companies said.

“This is all about improving ROI [return on investment] for clients and experimenting with next-generation metrics and processes,” NBCU president of sales and marketing Mike Pilot said in a statement. “Admira can help clients efficiently plan, buy and engage specific audience segments across the breadth of our broadcast and cable properties, enhancing the close relationships we have with all of our agency and client partners.”

The Admira system was developed by Navic Networks, which Microsoft acquired last year in a deal reported to be worth $230 million.

Admira uses real-time audience measurement data — collected from satellite and cable set-tops — and overlays that with data about purchasing and demographics. Microsoft claims Admira continuously optimizes ad placements in response to “near-real-time viewership data.”

NBC's local media group began testing the Admira system in March with inventory from Los Angeles's Universal Sports digital channel and then added inventory from KNBC, the NBC owned-and-operated station in L.A.

The companies said VivaKi, the Publicis Group operation that encompasses Starcom MediaVest Group, as well as Zenith Optimedia and Digitas, will be among the first agencies to use Admira later this year.

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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