But Prepare for Target Ads Says NDS

SOURCE: Rapid TV News
DATE: Monday, January 28, 2008

by Chris Forrester

Latest data from BARB says we are watching more ads than ever. NDS, which has R&D teams working on personalised ad-insertion technology, says an advertising revolution is needed.

“The advertising model for television must change dramatically,” says NDS’ CEO Dr Abe Peled (left). “Free-to-air broadcasters depend on advertising and they’re challenged today because the free-to-air model calls for a spray of advertising to everyone, ideally a large mass of people, but increasingly this is less effective because of audience fragmentation. So you have less people viewing an [individual] ad, and not helped by PVRs which can easily skip the ads. In other words a $75bn industry based on free-to-air advertising will be looking for a much better solution. Pay-TV, or at least those with more sophisticated set-top boxes that are run by a platform, can now target advertising direct to the consumer.”

Peled admits that the idea is not new. “I know this has been talked about for years, but just because we have been talking about it and it hasn’t yet happened doesn’t mean it’s not a bad idea!”

And he also admits there are still technological challenges. “There are two challenges, which includes the ability to seamlessly put targeted advertising correctly before the viewer, and this technology is still being developed. Ideally this sees everyone having either a broadband connection, or a DVR, and ideally both. The second challenge is in the mind set of everyone in this business. The current advertising on TV channels requires these advertisers to start again, doing deals with platform owners in order to make their ads appear in a targeted fashion – and this isn’t a trivial challenge. But over the next five years, perhaps driven more by fear than greed, people right across the industry are going to have to start changing. People don’t object to the concept. Indeed, if advertisers and creative agencies can get the prospect right then in my view consumers will welcome targeted ads.”

“I have set my guys a target, asking how do you get less minutes of advertising per hour and yet get more revenues out of those minutes. Common sense tells you that if you are able to direct the ad to the right people then it will be more valuable, and need less minutes of ads just to reach a target audience via the mass market route. This isn’t going to happen overnight, but over the next five to 10 years we will see some radical differences in this area,” says Peled. 

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