Chicago marketer Starcom MediaVest Group (SMG) and satellite TV provider DIRECTV signed an agreement in principle that has SMG assisting DIRECTV in delivering scaled, household-addressable advertising to customer households that use DVRs.
The deal, which the two dub “the first of its kind on a national level,” reportedly makes SMG the first agency network to “provide its clients with the ability to address highly relevant advertising messages, including the right to be the first to identify the audiences that best fit their clients’ needs for addressability,” the partners say.
“The consulting segment of the SMG/DIRECTV relationship begins immediately, with the addressable ad technology set to begin testing in 2011,” the two noted in their announcement this morning. “After testing is complete, DIRECTV will deploy household-addressable advertising capability to the nearly 10 million customers expected to have DVRs, with 25 of the top-rated cable networks.”
“This is a glimpse into our industry’s future. Up until now, we’ve only been able to test the power of addressability in local markets. We proved its value beyond a shadow of doubt, but hadn’t yet conquered scale until now,” adds Laura Desmond, CEO at SMG, whose clients include Procter and Gamble, Coca-Cola, and General Motors. “As a result of this partnership with DIRECTV, we can now invest our client’s dollars in addressable messaging at the national level. We believe this is the tipping point, an entirely new marketplace is being created and shaped that will increase marketing effectiveness.”
How lucrative is this new ad partnership? According to Tracey Scheppach, senior vice president/innovations director at SMGx, the trading and innovation arm of SMG, “At SMG, we’ve run the numbers and feel confident that the creation of a viable national addressable platform can infuse $10 billion in incremental revenue into the television marketplace as its appeal is universal and has the ability to bring a whole new class of marketers to the medium. It’s taken years of hard work to get this far, but we’ve got light at the end of the tunnel and we’re ready to put our money on the table.”
As part of the advertising deal brokered by SMGx, media agency clients will be able to segment their ads on a national level to selected consumers based on multiple factors, including geography and customer segmentations, as well as third-party sources and the marketers’ consumer databases.