That's part of the attraction to Dave Morgan, who has made a
career of building businesses on things that seemed to be a bit
ahead of their time. In the mid-90s he founded one of the first ad
servers and ad networks at Real Media; later he founded Tacoda
Systems and popularized the term "behavioral targeting," which was
about using data to serve the right ad at the right time.
Now, he'd like to apply some of the same techniques to TV
advertising. It's a bit of unfinished business for Mr. Morgan, who
says it's been his dream since he bought into the concept of the
"Information Superhighway" in the early '90s. Online ads were
great, but limited in their impact for brands. "I went into online
in 1992 because TV wasn't ready," he said. "I'm proud of that time
but always felt I was at the kid's table as far as display." The
kid's table serving online display is an $8 billion U.S. market.
TV? $70 billion.
Nearly 20 years later, the dream of targeted ads to individual
households is slowly coming to fruition, mostly in small-scale
trials on individual cable systems. But Mr. Morgan has seen this
movie before and believes it will be at least another five to 10
years before the infrastructure is built out and marketers figure
out what to do with it. So, Mr. Morgan is doing the next-best
thing, the most internet-like thing: gather up massive amounts of
viewing data from providers such as TiVo, Rentrak, Kantar Media and
TRA, as well as cable operators like Charter to build an ad network
Actually, it's an audience network if you're splitting hairs.
Mr. Morgan takes this data, finds fans of specific shows, or types
of shows or actors, like Westerns, animation, Julia Roberts or Will
Ferrell, combines that with the age and gender information already
available from sources like Nielsen, and packages TV spots that
over-index a target audience to TV advertisers. Those could be
low-cost spots on niche networks or in dayparts outside of prime
time. You could also target segments like "out and abouters" who
don't watch TV on Friday or Saturday nights.
It is not, as purists will say, anywhere close to the one-to-one
targeting held out as the industry's holy grail, but it is some of
the most sophisticated targeting that has been practiced at any
time in the 60-year history of TV. "That is the first step on the
road to addressability," said Ms. Scheppach. "It is an incredibly
important step on the journey." Mr. Morgan has packaged more than
50 TV ad deals like this. He started out with the TV networks
themselves, helping them better target their promo spots. That
proved the concept and gave them a closed feedback loop:
better-targeted ads yielded more tune-in or awareness of network
shows. CBS's marketing chief, George Schweitzer, is on Simulmedia's
It isn't the first time Mr. Morgan has tried TV. The first was,
in fact, too early. Back in 2000, Real Media did some trials with
some European TV networks (as did Microsoft) and found it a
technical quagmire. "There are graveyards littered with companies
that have tried to optimize TV in the past," he said.
The second opportunity came around in 2008, when cable operators
started releasing their viewing data and networks started to feel
the pressure to make their product more measurable. Mr. Morgan left
Time Warner, which bought Tacoda Systems in 2007, and launched
Simulmedia. Others saw the same opportunity: Microsoft bought Navic
and started building its TV ad targeting platform Admira. Google
launched Google TV. "For everybody, the set-top box data is what
links it together," said Jen Soch, senior VP-advanced TV at
Meanwhile, cable and satellite operators are rolling out their
own targeting systems with technologies from companies like Visible
World and Invidi. Cablevision has 3.2 million addressable homes;
DirecTV and Dish Network are rolling theirs out later this year.
But Mr. Morgan believes the market can move faster than the
If Mr. Morgan's approach sounds familiar, that's because it is.
It's the same formula that ad networks promised on the web -- take
low-cost inventory, add data, and make it more valuable to
marketers. Some people blame online ad networks for dragging down
online advertising prices, but Mr. Morgan said ad networks unfairly
took the fall: The real problem is that the sheer volume of pages
and impressions exploded, thanks largely to Facebook and other
social networks. That won't happen to TV, even if channels and
delivery systems continue to evolve and expand.
Further, it's just a different product. "It is not an impression
-- it is a 30-second, interruptive, attention-owning sight, sound
and motion spot!" he said. "That is unique, and they are not
putting more spots in the hour tomorrow than they have today."
But will it expand the market? When marketers know where the
waste is, they'll stop buying it, but they also may pay more for
the right target audience at the right time. "TV is measurable to
the extent that it drives product sales," said David Cooperstein,
VP-CMO, marketing leadership at Forrester. "But what you don't know
is whether you spent the optimum amount to get that last box of