Video ad network YuMe has developed a capability that has vexed TV for years: how to target individual households with customized ads.
The startup, which filed for an IPO last week, has developed a household targeting feature for brands to advertise to any and every connected TV, smartphone, tablet and computer in a residence as a way to soak its inhabitants and persuade whichever one holds the pocketbook.
"Brands are saying we want to get supporting family members messaging to the decision maker," said YuMe SVP-marketing Ed Haslam, who was unable to comment on the company's IPO because of an SEC-mandated quiet period.
For example, the purchase cycle for buying a car is long and usually involves more than one member of a household. Mom and dad may drive the decision, but anyone sitting shotgun like a child or live-in grandparent could sway them. That strategy is the top reason advertisers requested the feature, Mr. Haslam said, and is being piloted by Hyundai and its agencies Innocean and Initiative for its Genesis model.
Hyundai is targeting affluent shoppers with its campaign using a mix of age, income and geographic information to reach households in markets with a high propensity toward premium vehicles,said David Matathia, director of marketing communications at Hyundai. The automaker had previously tested addressable TV campaigns with cable providers, and Mr. Matathia said household targeting is "on the precipice of becoming part of the norm" if it is able to satisfy marketers' demands for scale.
"As these kinds of household opportunities become more prevalent, I think they will start to become a bigger percentage of overall buys [potentially turning into] a constant stream of household-targeted initiatives," Mr. Matathia said.
To aim ads at all the various devices in a household, YuMe homes in on the IP address used tied to the residence's wireless network and layers in data from YuMe, YuMe's publishers and third parties to determine which households to show ads for which brands. Mr. Haslam said the company's ad network spans more than 147 million video viewers each month.
What YuMe aims to accomplish with household-targeted video ads is not so different from cables companies' years-long efforts around addressable TV, such as Cablevision's partnership with Group M in 2011 architected around segmenting the provider's New York City subscriber household into five segments.
It's still early days for addressable TV, but adoption has been hindered by TV's traditional business model that equates smaller scale with fewer dollars, said VivaKi Nerve Center president-products and solutions Kurt Unkel. If and when addressable TV gains traction, it could still be limited to a single, albeit primary, screen in households fractured across multiple devices while Internet-delivered video companies stake claims on that open real estate that sums up to TV-like scale at potentially better costs to advertisers.
"Anything that helps us narrow focus to who we're trying to get at and create efficiencies and eliminate waste is intriguing.... A multiple screen approach is definitely where the future is headed," Mr. Unkel said.
Specific Media employs the same IP-based strategy as YuMe for its own household targeting feature, but Mr. Haslam pointed out YuMe differentiates by providing the capability for in-stream video ads and enabling retargeting outside of the home.
Mobile retargeting is a complicated endeavor as devices like the iPhone don't carry cookies that are used to target ads on desktop computers. In a watered down version of desktop retargeting -- identifying a browser on one site then recognizing them on a different site and serving a behaviorally targeted ad -- YuMe's capabilities are limited to a single app per instance.
"If someone's at home listening to their favorite radio streaming service who's one of our partners...we can find them again if they're at the office streaming music through that app," Mr. Haslam said.