AMC Networks Delivers Addressable TV Ads to Wider Audiences

Walling McGarrity/Courtesy of AMC Networks

A media company known for giving new life to the undead is doing something similar to an advertising technology that many believe will buoy a U.S. TV industry grappling for new lines of revenue in a challenging era.

TV networks, ad agencies and cable companies have tried for more than a decade to launch so-called “addressable” ads that can be sent to specific households containing the people most likely to respond to them. Diaper ads, so the thinking goes, might be dispatched over the ether directly to a family expecting a baby, or a car ad might go right to people in the market for a new automobile. The commercials have been around for years, but getting them sent out nationally has proven to be an ordeal.

Now AMC Networks, the company that brings audiences such programs as “The Walking Dead” and “Better Call Saul,” believes it has overcome many of the difficulties that have kept addressable ads from gaining wider traction on TV. Working with Omnicom Media Group, AMC ran addressable campaigns in November and December for Volkswagen and a second advertiser on its flagship cable network during national commercial time, says Kim Kelleher, president of commercial revenue and partnerships for AMC Networks, in an interview. Viewers who fell into a particular consumer definition saw the spots. Those who did not saw a promo for AMC programming.

“We are hopeful that all of the media companies are leaning into this space as aggressively as we are,” says Kelleher. “We are probably in early days,” she adds, but “this is going to continue to build on itself.”

Others are testing these waters as well. ViacomCBS and Dish in January announced they had delivered addressable ads via set-top box and with the technology firm Adcuratio to subscribers of the satellite service who watched CBS-owned stations.

Marketers have been able to launch addressable ads for a long while, but primarily in two minutes of local inventory accorded each hour to cable systems. Getting national reach has been difficult. Advertisers have had to negotiate placement of the commercials with one cable or satellite system at a time. AMC’s ability to get the ads on a national network moves the technology to a different level.

The company was able to accomplish the task by working in tandem with the Omnicom media-buying unit, and teaming up with Canoe Ventures, a technology company set up to help advertisers work across cable systems operated by Comcast, Charter and Cox. The first AMC campaigns involved Comcast and Charter. Cox systems are expected to be involved in future efforts.

“We inserted an advertisement over regularly scheduled advertising in a specific footprint based on an audience segment we matched to it,” says Evan Adlman, senior vice president of advanced advertising and digital for AMC Networks, in an interview. “Our goal is to roll it out to the rest of our networks.” The ads can also be deployed to AMC programming that runs digitally on in video on demand.

As more traditional TV viewers turn to interactive streaming-video services and use broadband-connected TV sets and advanced set-top boxes, advertisers have more opportunities to aim specific commercials.  They can even deploy them based on specific attributes and behaviors. Volkswagen, for example, directed its addressable ads at viewers planning to buy an SUV.

TV networks believe they can sell the new ad format at a premium to traditional commercials, because placement of the ads often relies on data and targeting tools supplied in part by the media outlets.

If successful, one can envision advertisers like Pizza Hut, Ford, Apple and Pampers all squeezing ads into a single addressable availability, with their commercials only surfacing in front of narrower audiences, AMC’s Adlman says the company can put as many as 12 different advertisers into a single addressable slot, and that each of those advertisers can deploy between one and three creative executions, depending on the customers they are trying to reach.

“I think the long play is all spots are going to be addressable,” he says. “I think we are far away from that as an industry, but as a company we are going to lean into that by diving in head first.”

One factor in media companies’ new push for the technology is the rise of new kinds of advertisers who have used digital techniques to build their business. Companies like Wayfair, Dollar Shave Club, Warby Parker and others specialize in so-called “direct response” techniques and are more familiar with aiming ads at customer niches. To grow, these companies have increasingly turned to TV, but they aren’t leaving their digital savvy behind as they do so.

For their part, TV networks are eager to court these new sponsors, who often don’t have decades-old deals that keep pricing increases to a minimum year after year.

AMC Networks touts its use of the technology as the industry gears up for a new “upfront” sales season, when TV networks try to sell the bulk of their ad inventory ahead of their next round of program launches. Meanwhile, says Kelleher, the advertisers already using addressable technology on AMC intend to keep doing so into the second quarter.