DirecTV, Dish Network Partnership Further Explores MVPD Addressable Advertising Offering

Dish and DirecTV are combining their sales efforts for addressable ads to deliver a customized audience for statewide races and issue-based campaigns, they said in a news release (http://bit.ly/1iDQnCj). Statewide political campaigns will have the ability to target their TV ads at the household level within more than 20 million DirecTV and Dish households, they said. “Campaigns can focus their message to a precise set of potential voters and eliminate the spending waste."

Advances in technology and lessons learned from online behavioral ads have led MVPDs to offer addressable online platforms, said CEO Dave Morgan of Simulmedia, which aggregates TV audiences to help advertisers target and measure ad campaigns. “The idea of giving a different ad to every household has been a holy grail for 20 years,” but there wasn’t a market for it, he said. Because of online ads, the MVPDs have models they can use to make this happen, “and virtually every major advertiser has a certain degree of sophistication with targeting ads to people and not just to programs,” he said.

Offering the platform benefits pay-TV providers by making them more appealing to advertisers, said a spokeswoman for Visible World, which helps target households for Comcast’s addressable ad platform. MVPDs want to sell their ad space, she said. “If the MVPDs can make the advertisers’ inventory more effective, then that makes it far more attractive to advertisers.”

Anonymous viewing data through set-top boxes allowed the landscape to change, Morgan said. In the past few years, there’s been a lot of anonymous viewing data available from the market through set-top boxes mostly, allowing advertisers to target types of households without identifying individuals, he said. “Even if you wanted to deliver a specific ad, you didn’t have a data system to do it, you only had the Nielsen ratings, which were never designed for addressing ads.” Now there is technology being built by MVPDs, an experienced and sophisticated market of advertisers that understand it and online and data platforms made for targeting, he added. “Now that they're there, we're going to see it happen much faster now."

Some TV ad technology providers said focusing on political campaigns can be attributed in part to use by President Barack Obama’s 2012 campaign. Dish and DirecTV appear to be “focusing on political ads specifically because of what Obama did,” said Seth Haberman, Visible World CEO. “Addressable advertising was so effective in the last election, it’s going to be increasingly popular.” Obama’s was the first highly visible political ad campaign to use set-top box data for more than just research, Morgan said. “It was used to tactically drive the media that they purchased for the campaign and they were able to utilize cable spots in two times the amount of networks than the [Mitt] Romney campaign."

DirecTV and Dish already offer household addressable ads, and are teaming up to have more scale, the companies said. “If there isn’t really big national scale, you can’t get the attention of national advertisers,” said Morgan. “I think the only way they can do it is if they team up.” The MVPDs already work together to sell advertising inventory, said Haberman. “Historically, such agreements have to be well thought out, because they can be very hard to keep going despite the obvious merit.”