Addressable TV ads meet with agency and marketer resistance

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Addressable TV advertising is fast building buzz among marketers and media agencies as it extends reach to the top 10 U.S. markets. But the technology for tailoring ads based on geography and other demographics also faces reluctance from some agency creatives and national advertisers.

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 Miami, Chicago, Detroit, Boston, Miami, Dallas, Denver and San Francisco via 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."

national marketers

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

Lance Maerov, senior VP, 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.

contributing: claire atkinson, jean halliday, richard linnett, lisa sanders

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