Ford Dealers Test Addressable Cable TV Ads

Viewers See Customized Commercials Targeted by ZIP Code

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DETROIT ( -- In the latest mainstream experiment with addressable cable TV advertising, Ford Division dealerships are running a pilot campaign for trucks in New Jersey and parts of New York.
The top video is a version of the Ford ad for the F-150 STX model, the one below it is for the F-150 XLT. Both begin the same way but end with different content specific to their models.

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Database Marketing Principles Applied to TV

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Addressable advertising is, essentially, the execution of long-established database marketing principles using the technology of cable TV distribution. Controlled by a central customer database, the system segments viewers by various critera and then automatically inserts different versions of an ad for that segment.

Nine commercials
The Ford campaign is using customized cable ads that deliver nine truck commercials offering varied deals depending on geography, income and demographics but actually targeted by ZIP codes. The marketer, working with WPP Group's J. Walter Thompson, New Brunswick, N.J., has been using Visible World's Intellispot software for its four-week test covering 26 cable zones.

The first 15 seconds of the nine 30-second spots are the same generic promotion of the overall Ford truck line. But the final 15 seconds hype a specific model or financing deal.

David Nappa, chairman of the Ford dealer association for the area, said the bulk of the spots are delivered simultaneously to suburban and rural markets in the two states for various F-150 pickup models. Higher-income areas such as Princeton, N.J., are seeing ads with a deal for the top-of-the-line Lariat. Ads for the base, two-wheel-drive STX model are delivered to lower-income areas with lease deals.

Three offers pushed
Only a handful of ZIP codes closer to urban areas will see an Explorer sport utility commercial, since buyers there have a lower propensity to buy pickups, said the Wayne, N.J., dealer. The ads push three offers on the F-150 models and one for the Explorer. Rural viewers will see the F-150 with hay bales in the bed; bicycles are seen in the bed in one suburban version.

Mr. Nappa said pickup truck sales will be compared to those of a control group in the adjoining dealer ad group covering Manhattan, Long Island and Connecticut. That group is running a single F-150 TV commercial.

Best-selling model
The goal is to sell more F-150s in the region as Ford aims to break its all-time record for the pickup set in 1997, he said. The F-150 is the Ford Motor Co.'s best-selling model and the nation's perennial top seller, car or truck. A secondary goal is to test the ad technology to track which messages worked best.

New York Interconnect
New York Interconnect, a cable sales partnership between Comcast and Cablevision, is distributing the customized ads. Ed Renicker, senior vice president and general manager of Interconnect, declined to reveal the cost, but said the deal is aimed at capturing more billings from long-standing client Ford, rather than premium rates. Population in each zone can vary from 20,000 to 250,000 people.

Ford can change deals for any zone without the time and cost of re-editing an ad, said Claudio Marcus, executive vice president of Visible World, adding that his company processed campaigns for 35 advertisers this year -- nearly half of them automakers. "Most are dabbling using existing commercials," he said.

Ford's campaign uses the lowest level of the technology's capabilities, he pointed out, noting that the the system's full potential is expanding in direct proportion to the number of homes installing the latest interactive version of digital cable TV delivery. Currently about 35% of cable subscribers have the new interactive digital set-top boxes. That level is expected to reach 70% by 2006.

VOD drives infrastructure upgrades
Consumer demand for cable TV video-on-demand services is driving cable companies to install the new interactive digital set-top infrastructure that also supports full-bodied addressable advertising, Mr. Marcus said.

The more sophisticated versions of addressable cable TV ads can be targeted more precisely using household demographics such as gender, age and income rather than just ZIP codes.

"We are in the diaper stage right now," Mr. Marcus said, "and many marketers and media buyers are just beginning to understand what it could mean to execute cable TV campaigns in much the same way as direct marketers use household data to plan and execute mailings."

Tim Hanlon, senior vice president of emerging contacts at Publicis Groupe's Starcom, Chicago, said the advertisers have been dabbling with addressable advertising since 1998 but that the results have generally been "interesting but inconclusive."

"A good number of our advertisers are interested when it's more sophisticated than it is today," Mr. Hanlon said.

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