Cable Show ’08: Cable Must Rev Up Addressable Advertising
Chrysler Chief Marketing Officer Deborah Wahl Meyer Urges Cable Industry to Put Pedal to Metal on New Technology
By Anne Becker -- Broadcasting & Cable, 5/20/2008 9:51:00 AM
New Orleans -- Target better or be left behind. That was the word to the cable industry from one of the country's largest automotive advertisers Tuesday in a call to arms to cable to speed its push for addressable advertising.
As cable programmers are already working with advertisers to create custom messaging, operators need to better enable technology that would allow those advertisers to drill down to specific demographic audiences in delivering their messages, said Deborah Wahl Meyer, vice president and chief marketing officer for Chrysler.
Addressable advertising -- the capability to target television advertising by household -- has been promised by cable operators for years, but it is now closer to mass adoption than ever at a time when advertising dollars continue to shift toward the Internet for the targeting specificity it offers, as well as the accountability advertisers crave to make sure their ads are seen.
To stem the flow of money away from other media, such as cable, operators and advertisers should work together to speed the momentum of bringing addressability to the marketplace, Meyer said.
"Cable's ability to maintain its value is absolutely critical to automakers that are under intense competitive pressures," she added. "It really is all about content meets technology meets customers. Automotive is counting on media partners like cable. How can we work together to build something new and something great? We want you to push us to the next level as much as we need to be pushing ourselves."
Meyer addressed members of the cable industry gathered here on the last day of The Cable Show ‘08 on a panel entitled “Getting Engaged: Advertising's Quest to Connect.”
The panel -- which also included Cox Communications president Pat Esser, Cablevision Systems chief operating officer Tom Rutledge, Fox Networks Group president and CEO Tony Vinciquerra and Naked Communications chairman and CEO Paul Woolmington -- capped a three-day annual gathering of some 14,000 attendees: cable operators, programmers and new-media affiliates.
While some $1.2 billion was spent on cable in 2007 by automotive advertisers -- making auto the No. 1 category in terms of spending -- the percentage of dollars the industry is devoting to cable over other media is shrinking as, like other advertisers, automakers are turning to the Internet's targeting specificity as an alternative.
For this reason, advertisers are looking for cable operators to foster "two-way" marketing, rather than merely telecasting ads to broad audiences of viewers. That two-way communication process can be achieved, for example, through long-awaited, but so-far-little-used, interactive advertising, through which viewers can engage with ads through their remotes.
The nation's six largest cable companies are working to create an addressable advertising buying platform called Project Canoe and increasing testing in various markets. Narrowcast addressable advertising enables advertising managers to tell operators and advertisers what ads were sent and how many times, giving them more accountability for their messaging.
Cable operators are testing a slew of other ways to ensure that advertisers see ads at a time when technologies like the digital-video recorder are making it increasingly easy for them to go unseen. Cox, for example, has been testing technology in its Orange County, Calif., market that enables the operator's subscribers to watch prime programming immediately on-demand but prevents them from fast-forwarding over ads.
"We can turn on technology to get more accountability," Esser said in talking about that ad-skipping program. The ad-skipping technology could actually lead to a bump in primetime television viewing of 5%-10%, he added.
In trials, 25% of the people who watched primetime shows on-demand in Orange County said they would not otherwise have watched those shows. Meanwhile, another 25% said they would now regularly watch those shows in primetime when they otherwise would not have.
"Consumers just want content on their own time," Esser said. "The consumer doesn't care whether they have a DVR in their house or they get it on VOD [video-on-demand]."
Still, just how rapidly new technologies are drawing people away from regular television-viewing habits is often overstated. Only about 23% of houses even have DVRs right now.
"While the DVR is a bit of a speed bump for some networks, we think we can manage it to the point where we can maximize the number of people who are watching commercials," Vinciquerra said. "A big percentage [of viewers] want control, but some don't. Many people want to watch Oprah at 4 and the 5:00 news at 5. I don't want to sound like a Luddite here, but this tapestry is enormously complicated, so to try to think of anything that is ubiquitous is difficult."
In encouraging cable to adapt addressable advertising, Meyer drew parallels between the automotive industry and cable in its early days. Both, she said, have had to be agile to adapt and succeed. She spoke of Chrysler's progress in the past year at putting the consumer first, aiming to be the "best damn little car company" through some 400 product enhancements since August, as well as the creation of a chief customer officer position and a customer advisory board.
She gave the example of the new Ram 1500 model Chrysler is introducing, saying that the company had five "macrotargets" of consumers it would like to target with the car. Using addressable advertising, cable could offer one ad to a 50-year-old parent of three and a different ad to a first-time car-buyer.
"Fragmentation is clearly an opportunity," she added. "Use cable's narrowcasting and targeting demographics and niche interests to turn it into an advantage."
For complete coverage of The Cable Show ‘08, click here.
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