Getting Hyper: TV Ads Increasingly Drill Down to Local Level

As TV viewing becomes ever more customized thanks to time-shifting and on-demand technology, the advertising experience has also dramatically evolved. Sure, massive national campaigns with a single 30-second spot still beam out to millions of people simultaneously. Increasingly, though, cable has used its inherent advantages to deliver hyper-targeted brand messages at the local level. Last year’s presidential campaign offers ample evidence of that influx. A study by Borrell Associates found that cable TV spending soared 52% over 2012 levels to about $1.35 billion, or 14% of the total spending in 2016, equal to digital advertising. One longtime practitioner of hyper-targeting is The Weather Channel. Its local forecasts, delivered for decades “on the 8s,” were an early cable innovation, a smooth-jazz interval when viewers could find out whether they needed an umbrella. Hardware installed in the headend of local cable systems made the forecasts possible, dividing up the country into 4,000 individual weather zones. These forecasts helped Weather become one of the bedrock networks in the cable bundle, reaching nearly 100 million U.S. homes. But in recent years the rise of apps and multiscreen viewing have presented challenges to all programmers and given many advertisers pause. “When I started here in 2012, this unique asset had gone into a bit of disrepair,” said Weather COO Freddy Flaxman. “We have invested tens of millions of dollars to rebuild that capability. We have added new things, like local weather along the bottom of the screen or pre-empting programming based on extreme weather. And we have been building out the ability to localize advertising.”

The opportunity for brands throughout Weather’s programming day is to tie directly into what viewers are experiencing. During an extreme weather event, like a blizzard or a hurricane, State Farm Insurance becomes a staple. Heat waves bring Coppertone, cold spells Thera-flu. In Weather’s system, those disparate ads can play during the same break to viewers in different regions. That’s one reason why Weather is one of the top-rated networks in all of cable when it comes to audience retention through commercial breaks. Hyper-targeted local advertising is one of the motivations behind the recent formation of OpenAP, a groundbreaking consortium enabling Viacom, Turner and Fox Networks Group to pool and share data in a system audited by Accenture. Joe Marchese, president of advanced advertising products for Fox Networks Group, says the initiative is “absolutely a step toward making addressability possible. Because once you go beyond just buying inventory on traditional demographics, you can really create a conversation with the viewer.”Addressable ads, delivered through MVPD set-top boxes, account for only about 1% of the $72 billion TV ad marketplace. But the ability to sell against not just demographics but actual consumer behavior, just as Google and Facebook do, holds incredible upside for the TV world. Dan Aversano, senior vice president of ad innovation and programmatic solutions for Turner Ad Sales, believes the OpenAP tools will enhance targeting but also discourage the spaghetti-against-the-wall approach that has defined TV ads for decades. “Let’s say an advertiser comes in and says, ‘I want the super-savvy shopper, coupon-centric dad’ and eventually we define that with data and it winds up being 600,000 people in the U.S.,” Aversano says. “We can tell them: You should not buy national television to talk to 600,000 people. It would be cheaper to put someone on a plane and have them knock on 600,000 doors.” – Dade Hayes [Hear from Flaxman and other experts on hyper-targeting at the TV Innovation Summit on June 8. More info at www.cfxtvsummit.com].