Sky ad-tech is good for viewers, not just marketers

As we reported previously, the US satellite Pay TV provider DISH Network  is making its linear household-level addressable TV advertising inventory available to marketers programmatically – and moreover, buyers can bid against other advertisers in real-time for the right to serve a targeted advertisement to eight million satellite homes. This week Sky Media, which has pioneered household-level addressable TV ads for linear television in Europe, suggested that auctions could be considered as a way to trade Sky AdSmart inventory at some point, too. But right now this is impractical due to regulatory issues.

Responding to questions at the MediaTel Media Playground event on Wednesday, Jamie West, Deputy MD at Sky Media, said: “We are thinking about real-time auctions and we are thinking about how agencies want to integrate with Sky as a platform, but programmatic cannot be supported today. It might come; it will probably come, but only for a small segment of inventory. It will not become a universal way for trading inventory.”

West stressed that agency buying platforms will not be allowed to plug into the back of a Sky set-top box. “That is not part of our roadmap,” he told the London event.

West gave an update on how Sky AdSmart has been received in the market and on the launch of the latest piece of Sky ad-tech, the unified multiplatform campaign management tool Sky AdVance (see initial story here). Apart from the appeal these solutions have for media buyers, he noted the impact they can have on the viewing experience. Based on 5 million viewing events covering ad breaks over a three month period, Sky data shows that channel tuneaway is 32% less when customers are served addressable TV ads using Sky AdSmart (compared to standard national ads). 

“I have to believe that targeting relevant advertising means you have a more engaged audience. So there are not only benefits to advertisers, and commercial benefits for Sky, but benefits to consumers as well,” West said.

He believes Sky AdVance will also improve the advertising experience for viewers. The product enables advertisers to reach Sky customers through the satellite TV platform, Sky digital properties (including its website and video within the Sky Go ‘TV Everywhere’ app) and across third-party digital media properties. They can then manage how many times they see the same advertisement and the order in which they see a series of creatives, if a campaign is designed to be watched in an ideal sequence.

“It opens up exciting creative possibilities. You have the ability to tell stories, ensuring the creative is seen in the order intended and delivered with maximum impact. That is good for advertisers and good for viewers, too.” 

Returning to AdSmart, the addressable TV advertising solution, West said the product is making television relevant as an advertising medium to more brands, including niche, targeted and young brands. It is bringing more local advertising money into television as well, the latest example being a Newcastle taxi firm that spent £6,000 on a targeted television campaign. There are currently 528 advertisers active on the platform. 68% of them are new to television advertising or to Sky. 65% of AdSmart customers return for at least another campaign. 

Where existing TV advertisers are moving money into addressable TV advertising with AdSmart, it is to fulfill a different role in their campaign. A car manufacturer now actively markets 12 vehicle models at the same time rather than three, as one example. A typical ambition is to achieve some incremental reach at good value. “It is recognized that when you hit a cover point of 70% [70% reach of target audience] it is very difficult to push that figure a few percentage points higher,” West explained. “Advertisers are using AdSmart to target the very lightest television viewers and while that may appear expensive, the cost per cover-point is good value.”

Up until now, targeting has been based on who we are (as a Sky household) and the attributes that are assigned to each home, which cover things like ‘transient renters’, ‘country living’, ‘uptown elite’, ‘empty-nest adventure’, ‘disconnected youth’, ‘low income worker’, ‘dependent greys’ and so on. When questioned, West confirmed that Sky is thinking about how it can use viewing data as another guide for advertisers who want to decide who to target. 

So would it be possible, at some point, for an AdSmart advertiser to target someone who can be defined as a ‘Newsnight’ viewer (a late-night current affairs programme that airs on BBC1 every week day)? BBC1 does not carry advertisements, so clearly the principle is that by knowing who watches a show, Sky could help advertisers find them when they do happen to be watching a commercial channel. West acknowledged that this would be possible (since they have viewing data for every channel).

[Editor’s comment – this is an interesting concept; a hybrid between audience segmentation with addressable TV advertising and what we already have on standard television, which is targeting around programmes, based on the fact that different programmes attract different audience profiles. If you wanted to catch people who watch ‘News at Ten’ (the late night news on ITV, the commercial broadcaster) that is easy: just advertise on normal linear TV during the ‘News at Ten’ ad breaks. But programme-defined audiences would mean you can achieve a similar ambition against programme audiences from non-commercial channels. In theory an advertiser could work out the kind of people that watch ‘Newsnight’ and piece them together using other attributes that define a Sky household – but just asking for ‘the Newsnight audience’ sounds like less work for the buyer!]

West pointed out that Sky AdSmart takes the best of digital marketing and brings it into television, the number one brand building medium”. In contrast, “Sky AdVance is about gaining the best understandings of television audiences and taking that into digital.” 

This is because Sky AdVance is a ‘television first, then digital to complement’ approach to advertising. It uses a knowledge of who saw a television ad to determine whether to serve ads to them on digital properties, and how many and when. So if you saw an ad on television, the campaign strategy may be to reinforce the same message on other ‘digital’ screens but the strategy might be to avoid hitting you again and instead seek out people on digital who missed the television version. 

“AdVance is a major play for us, bringing down barriers between the largest media [television and digital],” West told the conference. “We are fundamentally changing the way that agencies and advertisers can manage and deliver their cross-platform campaigns.”

As we reported previously, Sky gains an understanding of who saw a television ad from its viewing ‘panel’ of 3 million homes. This refers to census-level STB return path data and it provides second-by-second information on viewing across all channels. The company knows what programmes, advertising spots, sponsorships and promotional idents every household has seen. “The 3 million home panel is the largest in the world, as a proportion of the viewing population,” West declared. This is the basis for knowing whether a home was exposed to an advertisement on television, how many times and how recently. 

Online viewing can then be linked back to a Sky household (anonymously, using log-ins and other data matching), ensuring the television and online advertising exposure can be managed holistically. 

West stated that data is key to all the innovation coming out of Sky Media, today and in future years. He also said the company is investing £20 million per year in advertising technology. Advertising is now a major contributor to Sky profits.  

The Sky AdVance trial, which starts this month and continues through December, is massively over-subscribed. Sky Media needs 40 different advertising campaigns to be active during this period and the company has been offered over 400 to test. “We want the best use-cases to test the technology so we can go to market with a fully formed product,” West noted.

In one final update, West confirmed that dynamic advertising insertion into live streamed content will be available from Q1 next year. This means channels working with Sky (and Sky’s own channels) will be able to replace the advertising that was shown on television with new ads during the digital viewings. The inventory where this is possible will include Sky Go but also NOW TV, the standalone OTT service from Sky that includes a general entertainment package (as well as sports and movies).

West also revealed how Sky views itself now, as a company. “We are no longer just a content business, TV business or platform business. We think of ourselves as a connected business. We are all about connecting consumers to their content so they can receive it in any way they like.”

More on advanced advertising

Interested in multiscreen advertising, the combined use of television and digital to improve campaigns, household-level addressable TV advertising and advanced advertising generally? Check out Future TV Advertising Forum 2015, London, December 2-3.