Anything the Internet can do, we can do – sort of.
That, essentially, was a common message this week as Canada's biggest TV broadcasters made their sales pitches to advertisers for the upcoming seasons: You don't always need to go online to reach a precise target audience.
TV is seen by advertisers as a mass medium, a blanket way to get exposure for their brands to large segments of people at once. But to keep up with digital media, which can target very specific audiences and have gobbled up a growing share of overall ad spending, broadcasters told the ad-buying community at their "upfront" presentations that they are working hard to offer more tools to ensure their commercials reach the right people.
This is known as "addressable" TV, and in its ideal form, it means that people watching the same TV show on different TV sets would not necessarily see the same ads during the commercial break. Just as the ads you see online when you visit a website are often different from what someone else sees visiting the same site – because those ads are targeted to you based on your behaviours online and other data – the ads you see on TV could eventually be more targeted, too.
The problem? The infrastructure isn't quite there yet. The pipes that actually bring programs to your TV screen are not generally set up for this complex "ad insertion," though some newer systems are. But ad buyers and the marketers they work for are eagerly awaiting a change.
"We have to wait till [Internet-protocol television] is fully deployed until addressable becomes fully implemented in Canada," said Corus Entertainment Inc. chief revenue officer Greg McLelland.
Corus has been testing out addressable ads for roughly three years in the Golden Horseshoe region of Ontario, in a partnership with Cogeco Inc., which has built the technology to do so. Ad breaks are split up and targeted by postal code. Corus says it has seen smaller local advertisers buying time they didn't before, because the audience was too big and the space too expensive. In other postal codes, if another advertiser has not bought the space, the company runs its own network promotions, which frees up ad time elsewhere that would normally be filled with those promotions, Mr. McLelland said.
"At scale, what you're hoping is that you'd have advertisers who want the other spots" at a lower price, he said.
BCE Inc. has the Bell Fibe product, an Internet-protocol system that could allow for targeted ads.
"There are some nuances of the Fibe system that haven't allowed us to integrate that … but it's very much on our road map," said Kristie Painting, vice-president of digital platforms and revenue management.
For roughly a year, Bell Media has done more targeted ads in its shows through a partnership with Rogers Communications Inc., but only when they appear on the video-on-demand service on Rogers set-top boxes.
Rogers is working on its own IPTV product, licensing technology from Comcast Corp.
"We will be able to deliver an addressable audience" with that product, Rogers senior vice-president of media sales, Alan Dark, said in an interview.
TV providers in the U.S. have also been working hard to develop addressable offerings. But last year, those types of ads accounted for just 1.3 per cent of the ad spending on TV in the U.S., according to research firm eMarketer, which estimates it will grow to 2.2 per cent this year.
As the broadcasters work toward this future, all of their upfront presentations this week pushed a message to advertisers about data and targeting.
Bell has been developing a "data enhanced" sales process that will do a better job of looking at information about who is watching and then telling advertisers which programs to buy to reach the audiences they want. Broadcasters have always done this in their sales process, but as the complexity of the data that can be gathered has grown, they are trying to make that information more comprehensive.
Corus has an arrangement with Shaw Communications Inc. to monitor the data of close to 800,000 set-top boxes (of those it looks at 550,000 or so), so it can see what people are watching by postal code. It then overlays those geographic viewing habits with market research from Environics.
Rogers has also been testing a service called Videology that it will offer more broadly in a matter of months, which also offers advertisers the best programs for certain audience segments, based on research into customers' media behaviour and interests.
The next step for the TV companies is to make the ad-buying process itself easier, by offering automated services. This kind of automated buying, known as "programmatic," has had massive growth online. Some of the digital features, such as real-time bidding for ad space, are unrealistic in the TV sphere, but companies say they are working to open up some of the buying process to more automated systems as well. Allowing agencies to plug into software and determine their buying plan and target audiences is something the industry is working on.
"Digital buying has informed and changed the way we think about mass buying," Bell's Ms. Painting said. "The idea of being able to combine that powerful medium [of TV] with a more granular level of targeting, is very appealing."