Monday, November 17, 2008

Addressable Ads: Not worth your time or money.

Brian Steinberg's latest article "Addressable Ads Could Reinvigorate TV" is a lost cause.

Dish Network and ad-tech firm Invidi have developed a pact to develop "addressable ads" or ads targeted to specific households.  An example would be sending Pampers commercials only to houses that have an infant or toddler.  

Steinberg is very gracious in his praise of this new technology and venture.  I on the other hand, see it as a desperate attempt by the captain to save a sinking ship.

Steinberg admits that the lack of a universal connection to TV (satellite, cable, etc.) largely hinders a mass application of the addressable ads technology.  

To me, the technology is the least of the problems with this strategy.  For starters, I was surprised to learn that households with DVR's are only expected to be at 36% in 2012.  I thought that that number would be higher.  Regardless, as younger generations purchase their own cable services, and as long as Tivo and DVR is offered, I see our attention deficit youth opting more and more for the disappearance of commercials instead of opting for targeted commercials.  In the Pampers example above, say I am a household with a baby-I still might be a loyal Huggies user.  In which case I would not want to see any commercial because I know what I like, and am loyal and I would still be irritated by the Pampers commercial.  I would rather opt out of commercials all together, than opt for targeted commercials.  

Now this is not to say that all consumers will stop watching broadcast TV commercials, or will go to the dark side of Tivo/DVR.  I believe that there will be some consumers that avoid new technologies like the plague.  My Grandmother for instance, still has a turn dial TV with the rabbit ears.  I know a lot of older consumers that are afraid of messing things up with a Tivo or DVR.  Heck, a lot of them can't even operate their VCR's.  And don't get me started about their fear of the evils of the Internet.  So, for my Grandmother's demographic-I would say yes, addressable ads might be effective.  However when has an older, demographic that is afraid of change been a key target market?

Another problem with this strategy is that Steinberg compares ads on TV to targeted ads on the Internet.  This is not a fair comparison.  Television is primarily used for entertainment purposes.  Although the Internet can be used for entertainment, it also has a lot of other uses:  commerce, finance, research, communication, etc..  Targeted ads are effective on the Internet because consumers go online to find an answer.  Consumers watch TV to be entertained.

My last gripe with this article, is that Steinberg peppers the articles with rave reviews from major players in broadcast advertising.  This is their livelihood-so of course they are not going to say that ads on television are a lost cause.  Steinberg even quotes a study by Comcast and Starcom Media Group, showing the effectiveness of addressable ads, that found that 38% of the consumers with opt-out commercial tools, watched the targeted commercials.  To me, that number is statistically low, with more and more people going to opt-out commercial tools like DVR and Tivo, only retaining 38% of the viewers from a roughly 80% of viewers seems like a massive step backward.  Additionally, this was a self-serving study by 2 groups that are pushing this technology to save themselves.

My suggestion for any company with any type of marketing budget is to put your ad dollars online.  And I'm not just talking about banner ads, because to me, those banners that are forced onto the page that you are watching are equally as irritating as those commercials that are forced in front of you while watching television.  I recommend to do something interactive, engaging and educational.  Make the consumers want to watch or play with your branded material instead of forcing them to watch it.  

No comments: