The second the mercury dips below 30° this winter, a funny thing will happen on the Weather Channel: Spots for Campbell Soup Co.'s V8 Vegetable Juice will magically switch to commercials for a steaming bowl of the company's classic chicken noodle soup.
A few days ago, the Weather Channel began offering national advertisers a rare opportunity: customized TV commercials based on regional preferences, changes in the weather, even the pollen count.
The Weather Channel is betting its new "copy-splitting" technology—the ability to simultaneously send out different ads targeted to local markets across the country—boosts its advertising base and breaks ground in the way advertising is done at the national level. The system, called IntelliStar, is also a defense tool against unprecedented competition from 24-hour digital weather channels planned by NBC, cable operators and other local broadcasters.
In a media market increasingly cluttered with sound bites and sales pitches, the Weather Channel offers a unique way to "micro-market." Such narrowcasting—boring down to reach precisely the people who want a particular product—has always been cable's edge over broadcasters, but network technicians consider their home-grown system a breakthrough. "When the book of the first 100 years of television advertising is written, this is the beginning of an important chapter," gushes Paul Iaffaldano, general manager of the Weather Channel's media solutions group.
Better Targets, Minimal Waste
Customization of ads for cable has been around for more than a decade—but only on a regional level. Adlink, for example, an interconnect owned by several cable providers, customizes spots on a smaller scale through local avails in the Los Angeles market. Now Comcast has launched the technology in eight of its top 10 markets—including Chicago, Detroit, San Francisco, Washington and Philadelphia—and plans to have it available in 18 of the top 25 by the end of the year.
The ability to pinpoint potential customers has never been more critical for any business. Last week, Nielsen Media Research announced that, starting October 2005, it will make available audience estimates for national TV advertisements minute by minute. Gmail, the e-mail service being beta-tested by Google, scans the e-mails its users receive and displays relevant ads based on key words it finds. And Mitsubishi Motor Co. recently pulled $120 million in broadcast spots in favor of cable, magazines and the Internet. "The market is continuing to fragment," says Ian Beavis, a senior vice president of marketing for Mitsubishi. "Mass customization is upon us in every area."
Andy Donchin, director of national broadcast for Carat USA, a leading media planning agency, concurs. "Every single advertiser wants to reach their audience so specifically, it's like they want a map of their DNA. The goal," he says, "is to minimize waste and better target the audience they want to reach."
At launch time, the Weather Channel had four advertisers signed up for the new system: Campbell Soup Co., LG Electronics, Pinnacle Foods Corp. and Six Flags. By year's end, the network expects to have 20 companies sending spots based on several variables, such as temperature, pollen count, weekend weather conditions and geographic region.
By year's end, the capability will be offered to 1,500 cable headends, about 80% of the network's 70 million cable households.
Campbell is tapping IntelliStar to track temperature up until five seconds before it dispatches a commercial. If the temperature dips below 30°, the technology sends a spot for soup. Otherwise, it sends commercials for a series of Campbell's other products based on regional preferences: Pace Mexican cooking sauces are popular in the South, Pepperidge Farm cookies are big in the Northeast, and V8 Vegetable Juice is a favorite on the West Coast.
Tracking The Pollen Count
When Freeplay, a British camping-equipment manufacturer, tested the system this summer, if skies on an upcoming weekend were clear, IntelliStar sent out spots for a fire-starter. If rain was in the forecast, a battery-operated flashlight radio was promoted.
Six Flags used the system to run commercials based on geography—touting rides specific to each region's theme park—and weather conditions. If sun was in the forecast, it urged people to visit Six Flags that weekend. On cloudy days, a generic spot promoted the theme park. "We want the net result to be that the ad the consumer sees is so personally or contextually relevant they actually like seeing the commercial," says Iaffaldano.
One major pharmaceutical company, which declined to be identified, is considering using IntelliStar's ability to track the local pollen count, promoting allergy medications when the count is high and asthma medications when it is low. Says Weather Channel Networks President Patrick Scott, "If you trigger [a spot] to the weather, it's more relevant, the recall is higher, and the impact from an advertiser's point of view is greater." Research conducted by ASI Entertainment showed that weather-triggered sponsorships outperformed typical Weather Channel spots by 125% in recall.
Although Weather Channel programs the system primarily on weather fluctuations, the company is already looking to license the technology to non-weather networks, retail and hotel chains, and video-on-demand providers. CNN, for example, could run a localized crawl over its news programming in each market. MTV could send different music videos to different regions based on musical preferences.
A Eureka! Moment
IntelliStar was created in part to snag viewers from local broadcast stations—a battle the network has fought since its inception 22 years ago. Because the weather forecast on the local news is popular with viewers, Weather Channel has always tried to better customize its local weather coverage to compete.
To that end, the company has invested heavily in computer technology that allows it to send different local feeds to cable headends around the country. IntelliStar, the latest iteration of that technology, is a quantum leap ahead of the previous system because it allows the network to transmit full-motion video. Now local weather forecasts can feature on-camera meteorologists instead of computer-generated radar maps.
A few years ago, when the network's advertising sales folks learned what the technology department had built, they asked, if the system could transmit local forecasts by video, why not ads as video, too? "Someone in the tech department said, 'Do you realize this machine knows local weather conditions? We can use this as a trigger point to say which ad goes where,'" Iaffaldano says. "It was a huge Eureka!moment."
The new system arrived at a perfect time for the channel, which has seen a ratings boom due to the sequence of hurricanes this season. Ratings increased 43% in the third quarter vs. the year-ago period. Iaffaldano says this shows that "people are in our environment because they're coming for a purpose. They're focused, and they're watching at a more concentrated, lean-forward level."
But there's a downside to this habit: Once viewers watch what they want—an average of about 12 minutes—they're gone. Historically, the network has focused on documentary-style prime time programming to hold viewers in time periods other than the popular morning daypart. Still, third-quarter ad revenues for the Atlanta-based network, which is owned by Landmark Communications, were up 18% over the same period last year.
As a national ad buy, Weather Channel is still relatively inexpensive. In 2003, CPM (cost per thousand viewers) was $3.22, compared with $5.62 on TNT and $9.51 on MTV. The integration fee for the cable-splitting is tiny—about $58 per spot for now—and network executives predict it will boost the number of advertisers.
Says Iaffaldano, "If we make a better mousetrap, a better advertising environment, more people will want to advertise, and in the end, they'll reward us."
