How to make TV ads really valuable? Block (some) people from seeing them

Interesting point made by Blackarrow President Nick Troiano in a recent conversation about cable’s emerging advanced advertising marketplace. A big driver of value for advertisers, Troiano thinks, is the flipside of what theorists most often talk about, which is audience targeting.

Instead, Troiano suggests the real economic advantage comes from excluding people from seeing commercials.

You heard that right: One of the advantages of addressable television advertising is the ability to keep commercials away from certain viewing groups. In other words, it’s about excising the worry about wasted circulation that has haunted advertisers ever since the 19th century department store maven John Wanamaker uttered his famous bromide that “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

“As much as we talk about targeting people, it’s just as much about excluding people,” Troiano said. “When you think of the purchase funnel, sometimes it’s easier and better to just remove the people you don’t want to have. It’s enormously valuable.” Case in point: ads pitching retirement plans for millionaires that reach 20-somethings with first jobs. Excluding the non-prospects can have a big impact on campaign efficiency and ROI.

Power of TV
Getting the right messages in front of desired audiences – and away from the wrong ones – isn’t a new idea. Applying identification and targeting algorithms is common on the Internet, where publishers are adept at aligning impressions and messages. But the craft is new to television, and Troiano, a former business development executive with Yahoo, thinks it’s going to have enormous impact. “People forget how valuable television is,” he said. “It’s just that today it doesn’t distinguish between whether you’re a buyer or not.”

Blackarrow’s role is to provide the digital nerve center that instantaneously marries commercials with selected audience profiles and, per Troiano’s exclusion theorem, intentionally overlooks others. The capability is a byproduct of emerging dynamic VOD advertising platforms that allow ads to be slotted in to discrete VOD program streams requested by viewers. Although some early implementations of dynamic VOD advertising are mostly about filling up ad positions across an entire national footprint, Troiano believes cable companies will advance relatively quickly to more elaborate targeting schemes that put different commercials in front of different types of viewers.

He believes a number of national and regional advertisers will announce addressable ad deployments using the cable VOD infrastructure this year. Over time, the ambitions will rise higher. “Our strategy is to ensure – and this is what VOD represents – the largest aggregation of real-time television inventory in the world.”

As that world emerges, a key determinant of how to best exploit the medium will come from a keener understanding of who watches VOD, Troiano said. Parsing out the audience differentiation for VOD programming versus traditional linear broadcasts will help inform how advertisers use the medium to align their messages with intended viewers. “You’re going to see from us and generally a focus on who really does watch VOD. Audience composition will help determine what the right advertising strategies are for this platform.”