New York-- Likening the industry push to the space race of the 1950s and 1960s, SMGx executives called for a major acceleration of addressable advertising by decade's end.
Just as President John F. Kennedy marshaled the nation's resources across various disciplines to reach the moon first after the Soviets had launched Sputnik, John Muszynski, chief investment officer of SMGx and Tracey Scheppach, senior vice president, innovation director at SMGx, want the industry's various constituencies -- programmers, distributors, technologists, data and research, advertisers, agencies and consumers -- to coalesce and fuel the advance.
"It's our intention to work together and be 100% addressable by end of decade," said Scheppach, during the executives' keynote address at the "Advanced Advertising 3.0, The Next Big Thing" event here Tuesday afternoon. The afternoon conference was presented by NewBay Media's Multichannel News and B&C.
Muszynski said that while he believes TV ad spending will remain strong over the years, that change is in the air. "We need to be in the business of targeting people with messages, not TV shows," said Muszynski, whose SMGx serves clients at all three Starcom MediaVest Group media shops. "It's time to embrace a world where consumers increasingly control the when, what and where of video consumption."
He added stated that while YouTube has its merits, user-generated content lacks the quality viewers have grown accustomed to: "The networks and studios produce hundreds of hours of content per month that require an ad-supported model. We know it, you know it. And deep down, consumers know it."
Without that support and the continuing fragmentation of audiences, Scheppach averred that the industry faces three "harsh outcomes": 1/consumers would have to pay higher subscriber fees (she believes there is a limit); 2/without the continued production of quality content, audiences will leave; and 3/the cost of spots will go "way up," unless advertisers can "get better value" from them.
All of which leads to an expanding addressable world. The presentation, citing a report by Bank of America Merrill Lynch analyst Jessica Reif Cohen last fall, indicated that the realm could add another "$10 billion in incremental value" to the $70 billion U.S. TV ad market.
The SGX officials noted its participation in addressable ad initiatives with 8,000 Comcast households in Huntsville, Ala., 60,000 with the nation's top operator in Baltimore and "a few hundred thousand Cablevision customers" in Brooklyn, as reasons marketers should consider working with it.
They noted that those efforts yielded "greater effectiveness and efficiency" for participating clients and those experiences are setting the stage for a more ambitious gambit with national scale, involving up to 10 million DirecTV subscribers with DVRs, come September.
After the presentation, Muszynski and Scheppach explained that the project encompasses DirecTV's local inventory across 25 cable networks. Keeping privacy concerns in the consideration set, technology testing is underway. Ultimately, direct-response ads, shaped by readily available demographic information, geographic location and third-party data, among other criteria, will steer specific messages toward the appropriate household.
Scheppach said there has been widespread interest among clients, as all of the advertisers involved with other addressable campaigns are among those engaged with the DirecTV gambit. SMG agency clients that participated in the Huntsville test included General Motors, Discover Card, Hallmark, Kraft Foods, Mars, Miller Brewing Co. and Procter & Gamble.
Noting the strides already made, the need for greater accountability and making ad dollars work harder, Muszynski made a "Declaration of Addressability," asking for commitments from various constituencies: that distributors deploy addressable systems; programmers/advertisers/agencies give addressable advertising the attention it deserves; and that we" listen to consumers, what they have to say."
"We're committed," he said, asking those in the room and others to express their allegiance to the cause by emailing their intent to IAmIn@smvgroup.com.
SGX also wants to create an industry forum bringing together distributors, consumers, technology companies, advertisers, agencies and programmers.
Muszynski said the aim is to develop standards and appropriate business models that not only help "harvest a bountiful market," but "fulfill addressable advertising's promise."
Additionally, Scheppach said the goals are to "ensure high video quality, relevant content and more effective and efficient advertising. This ,she said, is a way to "shape the future before it shapes us."
