See Three Versions of an Addressable Ad

Addressable TV Ads Expand to Top 10 Cable Markets

Database Marketing Principles Applied to TV

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CINCINNATI ( -- Addressable TV advertising is fast building buzz among marketers and media agencies as it extends reach to the top 10 U.S. is a pioneer in the use of Visible World addressable TV ads. This is a campaign done for last year's Mother's Day. One of three different creatives were displayed, depending on individual viewer demographics.
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Addressable Ad in Three Versions:

audio bug Below-Average Income
audio bug Average Income
audio bug Above-Average Income

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Addressable advertising is essentially the execution of long-established database marketing principles via the technology of cable tv distribution.

Demographic database
Controlled by a central customer database, the system segments viewers by certain demographics and then automatically inserts different versions of an ad for that segment. The mechanics are simply another aspect of the interactive capabilities that are being built into all of the nation's cable TV distribution networks.

For instance, in a Mother's Day campaign last year, used addressable ads aimed at three specific groups of cable TV viewers -- those of above-average, average and below-average incomes.

Different messages
The opening and closing creative of the 30-second spots were the same but the central product messages were quite different. For below-average income viewers, the spot offered violets in a basket for $29.99, a small stuffed bear with honey candy for $19.99 and a small arrangement of flowers in a clear glass vase for $29.99.

The version for average income viewers offeed violets in a basket for $29.99, a "Mothers Embrace Bouquet" in an earthenware vase for $59.99, and "Lilies in a Lenox Vase" for $79.99

The above-average income crowd was offered chocolate covered strawberries at $46.99, a "French Countryside" bouquet in a cobalt blue glass vase for $79.99, and a "Months in Bloom" service that delivers a bouquet a month to mom for the next year at prices ranging from $134 to $492.

Addressable ads allow marketers to more precisely match advertised price thresholds to the purchasing power and interests of specific audience segments even as they simultaneously reach the entire audience.

1-800=Flowers Los Angeles Mother's Day market test of addressable TV ads produced twice as many orders as non-customized ads in a control market, said Ken Young, director of communications.

But, like all emerging new technologies that differ from long-ingrained practices, addressable TV advertising faces reluctance from some agency creatives and national advertisers.

Visible World
Rolling into several big markets is Visible World, a TV technology startup backed by such players as WPP Group and Grey Global Group, whose Intellispot system creates and delivers TV ads that change message and creative elements to suit different viewers.

After launching a trial of the technology in New York last year following a 2002 rollout in Los Angeles, Visible World recently introduced its system into Boston, Chicago, Dallas, Denver, Detroit, Miami and San Francisco through Comcast. Next up are Washington and Philadelphia, CEO Seth Haberman said.

"We'll have gotten the entire top 10, with the exception of Time Warner's half of New York, by the end of [March]," he said.

Yet Mr. Haberman said most addressable TV buys today are coming from local and regional marketers. "We're pushing for larger national accounts," he said, "but they tend not to want to do things in just one or two markets."

Masterfoods experiment
Masterfoods, marketer of M&M's, Snickers and Pedigree and Whiskas, is among national marketers experimenting with addressable TV, according to executives familiar with the situation. At the recent American Association of Advertising Agencies Media Conference, Bob DeSena, director of relationship marketing for Masterfoods, urged broader testing of addressable advertising, but later declined further comment.

General Motors Corp. has tested addressable TV ads in Denver, and Michael Browner, director of media and marketing operations, said through a spokeswoman that the automaker "learned a lot." But he declined to offer specifics on what GM learned or what it's doing now in addressable TV.

While many media agency executives have embraced the idea of addressable TV, creatives often have not, Mr. Haberman said.

An unwillingness to change
"Doing something like this requires synchronization of media strategists, planners, creatives and the account team," he said. "Getting those people together to think about something like this is difficult. It has to be pushed by the advertisers."

Lance Maerov, senior vice president of Grey Ventures, acknowledges he has run into objections about the potential for the cut-and-paste customization to dilute creative impact. But he believes most creatives eventually can be won over.

Part of Grey's interest in addressability is the potential for using the technology for retail co-marketing programs via its J. Brown Agency, which handles retailer-customized marketing programs, including TV advertising, for such marketers as Procter & Gamble Co. and Altria Group's Kraft Foods.

But neither Kraft nor P&G has signed on to try addressable programs with retailers yet, and Jon Kramer, president of J. Brown, said he believes the technology still doesn't have wide enough household penetration to be useful to national brand marketers and retailers yet.

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Claire Atkinson, Jean Halliday, Richard Linnett and Lisa Sanders contributed to this report.

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