Sky AdSmart has clocked up nearly 500 clients, 69% new to TV or Sky Media

By Barry Flynn, Contributing Editor

Eighteen months after Sky AdSmart went live on TV, nearly 500 advertisers have used the service – 69% of them new to TV or Sky Media, Sky’s media sales house. During that time, there have been 2299 campaigns on the targeted ad insertion platform, more than 700 of them post-code-based, with a total of 1.9 billion ad impressions served.

Graeme Hutcheson, Head of Sky AdSmart, unveiled his latest set of statistics at the Connected TV Summit in London, saying “we’re really, really happy about the new-to-TV or new-to-Sky Media stats. It’s really pulling in loads and loads of advertisers who never considered TV before. That was really the ambition at the start and early signs are saying we’re delivering on that.”

One of major drivers  was the availability of post-code targeting, he said. “Being able to go to a double-glazing firm in Exeter who never have considered a TV campaign before, purely because it’s too broad and too expensive as an entry cost, we can go to a company like that and say ‘Look, we can target consumers or your customers in your particular area – and actually the entry cost, the capital costs for going into that aren’t massive because you’re only talking to 30,000 homes.’”

Despite ‘newbies’ out-numbering existing Sky Media clients on the AdSmart platform, Hutcheson conceded that the position was reversed when it came to revenues. “We’re seeing the majority of revenue come from brands who are very familiar with the way TV works and how it works for them. [For them] AdSmart is just a little add-on that enables them to really fine-target those-hard-to-reach audiences,” he said.

The vehicle which delivers AdSmart is the Sky Plus HD box, of which there are around 7 million installed, across “well over 10.7 million” Sky TV subscribers. AdSmart provides targeted ads against around 40 channels, which means, claimed Hutcheson, that the platform can reach “about 90 per cent of the audience every month.”

At launch, AdSmart was able to segment Sky Plus HD homes into around 100 different audiences. “We’ve got to a place now where we’re just under 400 targeting attributes that an advertiser’s able to use to really fine-tune their advertising campaign,” said Hutcheson. These are divided into 8 different clusters, which are each segmented into further top-level attributes, some of which can be split even further (see Figure 1 below). For instance, Experian’s Mosaic 2014 database has more than 400 bits of data per home, while the Lifestyle Fashion segment alone can be split into a further 33 targetable attributes.

Figure 1: Sky AdSmart’s eight top-level targetable audience categories

 Source: Sky Media

‘Custom segments’ have only become available relatively recently, said Hutcheson, and allow advertisers to plug their own customer data into the AdSmart platform and message just their own customers, or perhaps those they know are not. “Direct Line, for example, might know exactly who is in the market for renewal of home insurance. We can start sending those people specific messages about their insurance coming up for renewal,” said Hutcheson.

Among sectors new to TV or Sky Media, car dealerships feature heavily (400-plus have used Sky AdSmart so far), said Hutcheson. “[In the past] Ford may have used a Ford Focus ad to blast out to as many people as possible in the UK. They’re now using that 30-second ad, potentially chopping 5 seconds off the end, and using a dealership message at the end.” “A lot of spend” is also coming from retail outlets supporting store launches, property developers, finance and investment – sectors that would previously have relied on direct mail, online, regional press and regional radio advertising.

Hutcheson said advertisers were spending quite heavily in the direct mail sector and using a similar type of targeting. “But there’s a huge cost to something like direct mail,” he pointed out. “By the time you’ve printed out copy, you’ve paid for postage, you’ve paid for the targeting, your costs are quite big when you compare that against AdSmart. There’s a really, really compelling case there for an advertiser using AdSmart to supplement if not complement the direct mail space.”

The AdSmart technology uses a three-stage process to insert targeted ads into either live linear broadcasts or time-shifted ones recorded on the Sky Plus box (there is some confusion over the operational status of the latter facility: in his presentation, Hutcheson implied time-shifted ad insertion was already working, while at the time of writing, the Sky Media website stated that, currently, “it is only in the live broadcast stream that Sky AdSmart ads will play out”):

• In the first stage, the known attributes of a particular household are downloaded to the Sky Plus HD box via satellite. This data is constantly updated on a weekly basis.
• In the second stage, the Sky AdSmart platform decides which advertisers’ campaigns match a particular household’s profile, and the relevant ads are downloaded and stored on the relevant box.
• In the third and final stage, an algorithm detects an upcoming ad break where there is an opportunity to serve an ad, and inserts the relevant ad seamlessly into the video stream, effectively over-writing the default one. This so-called ‘hint’ algorithm also takes account of potential clashes – e.g. when its action might end up serving a financial ad into a break over which a competing financial advertiser had exclusive rights.

One intriguing point that emerged from Hutcheson’s presentation was the need for a new way to calculate ad spend – as much as for advertisers who use the platform as those who do not. How is the brand whose ad was overlaid to be compensated, and how can the brand owning the inserted ad know if it’s been seen or not?

With respect to the first question, Sky Media has worked with UK TV audience measurement company BARB to enhance its people-meter, so that every time an AdSmart ad is played out over someone else’s, BARB flags the event and ensures the scheduled impression is removed from the affected brand’s account.

As for registering whether an inserted ad has been seen or not, Sky Media has chosen to measure it as an impact only if the ad has been played 75% through in real-time. As Hutcheson remarked, in digital environments, an impression can actually be registered even where an ad is served but not viewable (see previous story), so 75% “is a big number that the advertisers seem very comfortable with.” Sky’s viewing panel, which includes half a million Sky homes, registers each successful ‘75% view’, and scales them up to provide the total number of targeted impressions successfully delivered for each participating advertiser.

In the future, Sky Media hopes to extend AdSmart’s functionality to a multi-screen environment, said Hutcheson. “Our vision for AdSmart is to have all screens seamlessly working together,” he said. “We’ve got our tablet users and our mobile users and our PC users [and] we’re ad-serving into those environments already. But what we want to be able to do is offer AdSmart across every single screen in a seamless way. It’s about being able to come to us and say, ‘Look, I need to target high-affluence people in Manchester’ and knowing as an advertiser that you can seamlessly tell a story across those screens and with various different creatives. It might be about showing a big 30-second ad on the big screen, telling them a bit more about the product on a tablet, reminding them on the mobile, and then driving them to purchase on the PC. A lot of the work we’re doing at the moment is developing the ROI [for that].”