Companies hope to marry ads with new tech that will deliver commercials to consumers more likely to respond
Comcast and NBCUniversal want to use technology to help advertisers fight back against an old Madison Avenue truism: “Half the money I spend on advertising is wasted. The trouble is, I don’t know which half.”
That adage, coined by retailer John Wanamaker many years ago, illustrates the challenge that has long been part of TV advertising. When you’re beaming, say, an ad for Pampers to millions of people watching primetime TV, a significant chunk of the audience is likely not to have an infant in the home.
To combat this, Comcast and its NBCU subsidiary are now offering to make available data about consumers, tallied from monitoring how Comcast’s subscriber base does and doesn’t watch commercials. The result, according to Linda Yaccarino, president of ad sales for NBCUniversal, is a process that will let advertisers devise a smarter media plan that reaches a greater percentage of the type of consumer they seek, as well as the ability when buying ads on video-on-demand content to “address” commercials to specific households.
“It truly is a product developed and designed to answer what the advertisers have been asking for quite some time,” Yaccarino said Thursday in a conference call with reporters.
The prospect of being able to target massive TV audiences more narrowly has been a prospect dangled in front of advertisers for years. The idea is to use third-party data about grocery purchases, movie attendance and the like to determine which households in a particular geographic region are more likely to be interested in any number of products ranging from luxury cars to dog food. Because the practice relies on a cable or satellite distributor to make it happen, it has evolved slowly. Many big advertisers, after all, want to be able to run a single commercial across the nation, rather than devising multiple pitches and refining them to function on one video provider and then another.
Comcast is hoping to turn that challenge into an advantage. While the data will help sponsors better choose the programs that beam their ads to consumers on a national basis, the video-on-demand advertising will reach only Comcast subscribers. Ad buyers have predicted the ability to refine an ad’s reach would prompt marketers to pay a premium for such stuff, but Yaccarino said only that pricing”will find a balance that is good for our customers and good for NBCUniversal.”
The ad technology marks one of the first tangible steps in one of Comcast’s biggest but most understated goals for its purchase of NBCUniversal, the first part of which took place in 2011: Use the merger to shape the way in which marketers advertise to the nation by taking the one-to-one addressable technology of cable and marrying it to the mass-audience reach of NBCUniversal programming. It’s worth recalling that NBCU Chief Executive Steve Burke once busied himself with building Comcast’s video-on-demand system, which has seen usage soar over time. Comcast recently unveiled a plan to wring more ad dollars from VOD as its subscribers indulge more in “binge-viewing” of episodes of their favorite programs.
TV viewers may not suspect they are seeing anything different in their commercial breaks. A fan of “The Blacklist,” for example, would not realize he or she was seeing an ad more likely to catch the interest of a consumer in the market for, say, a new smartphone. The advertiser would simply have used a more granular set of data to determine running an ad in the James Spader-starrer was more effective. As for video-on-demand users, that same gadget ad would appear when households identified as potential customers watched a show, but other viewers would simply see a different commercial – perhaps aimed specifically at their households, or perhaps just part of the regular advertising set to run with that selection.
The subscriber data is based on larger patterns and not on specific behavior of individual households.
The new data-driven ad offering is not likely to be adopted en masse, at least not initially. “”We’re going to launch this with select business partners,” said Andrew Ward, group vice president of Comcast Media 360, the ad-sales unit of Comcast. The companies expect to offer a broader and more sophisticated array of ad ideas in the months ahead, he said.