New Old competitor for marketing budgets - TV can do targeted ads now

The marketing minds at Choice Hotels International Inc., which owns Comfort Inn and Sleep Inn, used to figure that ABC’s “Good Morning America” was the primo spot for advertising to would-be travelers. Now they also like reruns of “Big Cat Diary” on Animal Planet, where they can reach a similar audience for a lot less. In getting to that conclusion, they are taking a page out of digital advertising’s book, using new sets of data to help pinpoint viewers with much greater specificity than the traditional demographic categories of age and gender. A new crop of tools from companies such as Simulmedia Inc., Nielsen Holdings NV, Rentrak Corp. and TiVo Inc. has sprung up to apply the lessons of “Big Data” to television.

As the rise of digital and mobile advertising threatens to yank ad dollars from the big cable companies and broadcasters, networks and marketers hope the new technologies will have the ability to leverage huge databases on what products consumers buy and which obscure shows they watch, making the television ad landscape more like the online one.

Choice Hotels uses Simulmedia, an advertising-measurement company that collects set-top box data for 50 million Americans to help companies target consumers watching “long-tail” cable inventory, that is, shows that are generally cheaper than prime-time hits but carry niche viewers. “Good Morning America,” for example, sells 30-second spots for about $43,000, compared with $650 for an ad on Animal Planet during the early morning, when “Big Cat Diary” airs, according to media cost forecasting firm SQAD. Choice Hotels spends 5% to 10% of its TV ad dollars buying these kinds of data-targeted audiences, according to Robert McDowell, senior vice president of marketing and distribution. The reason? A show like “Good Morning America” offers a mass audience, but targeted buys like “Big Cat Diary” add some precision. Simply put, you pay a lot less and you know the right person is watching.

Marketers have long purchased TV ads based primarily on program and commercial ratings as measured by Nielsen. The demographic segments created from Nielsen’s sample—blunt categories like “females ages 18-49” —are the basis for some $70 billion of TV ad deals annually. But Nielsen has lately begun to offer additional ways that advertisers can determine where they will get the most bang for their buck. In 2010, it formed a joint venture with digital media company Catalina called Nielsen Catalina Solutions. By merging shopper loyalty-card data with its own TV viewership sample, Nielsen says it can give clients a better picture of what kind of viewer is buying certain consumer packaged goods, an improvement on the typical age-and-gender-only demographic.

For example: Using Nielsen Catalina’s service, Publicis Groupe SA -owned ad-buying firm Starcom—which buys TV slots for Kellogg Co. brands—noticed that Rice Krispies wasn’t that successful with ABC’s “Grey’s Anatomy” viewers, according to Starcom executive vice president Rob Davis. So the ad buyer subbed out Rice Krispies for Special K, a brand they felt matched better with the show’s audience. Shopper data further revealed that “Scandal”—an ABC show popular with women—was actually a good place to advertise Frosted Flakes, a brand historically marketed more on male-focused programming. Mr. Davis said that the company adjusted Kellogg’s advertising allocation accordingly.

The TV industry is far behind online services when it comes to ad-targeting. In the digital realm, marketers routinely place ads not just based on consumers’ age and sex, but also their geographical location, shopping habits and other bits of information logged as consumers traverse the Internet. That is one reason that spending on digital ads is expected to reach about $82 billion by 2018, eclipsing TV spending, according to eMarketer.

TV advocates say their medium still provides greater “reach” than campaigns on the Web can, even if the latter provides more granular data. Companies like Simulmedia emerged in the past few years once cable and satellite companies began licensing out their set-top box data.

Targeting technologies can help TV networks demonstrate their value and stave off digital competitors, media executives say. If networks can assign to individuals “a value based on their true potential revenues you draw from them,” advertisers would have greater return on investment.

Source: http://online.wsj.com/articles/targeted-ads-tv-can-do-that-now-too-1416506504