Adsmart, how smart?

I am pretty excited about the launch of Sky’s Adsmart this summer.

For those in the TV industry that have been asleep or watching re runs of Mad Men, here is what it’s all about.

Since Sky has some pretty clever computing power sitting below your TV and a Hard Drive in the Sky box, they can control the delivery of TV advertising to you pretty uniquely.

Firstly they have profiled all of their Sky customers using Experian Mosaic software, this looks at grouping your into lifestyle and attitudinal groups so the marketeers can decide if you are likely to buy their product. If you over index you might be able to focus on this group who may have a higher propensity to buy (and in fact avoid all the people that are unlikely to buy).

They will then serve a specific advert or series of adverts to you based on these preferences on the basis that you can target a broadcast media more accurately the response rate and conversion rate would be higher.

It’s sort of Google Adwords meets Sky.

The difference of course between Google Adwords and Sky is that although Google control the auction process of bidding and serving ads to maximise volume and revenue, we have a slightly unfair auction situation with Sky who obviously will use this technology to get you to pay MORE for this targeted audience.

I am reminded of the conversation that my business partner had with a Wedding show organiser a few years ago. Their view was that brides to be have a higher propensity to diet before they get hitched (I agree!), the show organiser was very keen for us to get involved in the show, but while thinking about how to spend the marketing budget Andrew asked the following question:

“How many attendees do you expect at the Wedding Show”

Answer: “Around 1,000”

OK, so was the show organiser willing to match the cost of advertising on the wedding channel per thousand viewers?

Answer: Of course, said the show organiser

Great said Andrew, we will be attending for £3.50, send us the invoice and we will be there

At this point the organiser hung up the phone!!!

The real moral to the story is it is great to use targeting but you need to still way up the costs relative to doing no targeting, the premium you pay must not out way the benefit.

I am sure that pricing for Sky Adsmart will demand a premium (even to recoup the investment in the technology) and if you have a product that appeals to a very narrow demographic then this might be great, but most advertisers on TV are trying to find people that are not in the consideration phase for what they are selling!

Saying all that, the ability to provide serialisation of advertising messages to a distinct audience alone will be attractive to many brand advertisers and certainly buying a specific audience on TV while overlaying demographic information is very very exciting.

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