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DirecTV, Dish Connect on Interactive Ads

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LR Cable News Analysis
Light Reading
11/22/2010
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NEW YORK -- DirecTV Group Inc. (NYSE: DTV) and Dish Network LLC (Nasdaq: DISH) are close to striking a joint deal with a media buyer to run interactive TV ads in subscriber homes from both satellite-TV providers, a Dish exec said here last week at a conference dedicated to next-gen video services.

It would be the first ad deal that the satellite rivals have nailed down since teaming up in April to shop the combined reach of their interactive TV platforms to advertisers. The companies formed a joint venture called Advanced Satellite Advertising Platform (ASAP). (See Satellite Guys Start Building Their Own Canoe .)

"There are two clients in the fold now that we are very close to," Larry Samuels, GM of advanced TV at Dish, told attendees at the TV of Tomorrow – NYC Intensive conference.

Samuels said Dish and DirecTV are pitching advertisers long-form spots that would run in rotation 24-hours a day for two weeks at a time. The ads would allow subscribers to request more information with a click of their remote controls, and advertisers could also integrate games, as well as "information galleries," into the ads, he added.

Samuels said that the interactive ads are available in about 35 million Dish and DirecTV homes, and that the DBS providers are collecting detailed set-top data from a sample of 6 million of those homes. ASAP works with Rentrak Corp. (Nasdaq: RENT) and Kantar Media to process data from the set-tops, he added.

DirecTV and Dish are playing up their broad reach in their pitch to advertisers, but the ad rates that come with that reach may result in sticker shock for some media buyers.

"This is pretty expensive now," said Andrew Corry, VP and director of Amphibian, a cross-platform media buying group at the Initiative ad agency, recalling the reaction he had when Samuels told him how much it would cost to reach the combined subscriber base of DirecTV and EchoStar.

Curry and Samuels didn’t detail how much ASAP is charging for the interactive ads, which would run on DirecTV’s channel 115 and Dish Network’s channel 99.

ASAP is similar to the strategy cable MSOs have pursued with their advertising interconnects. While Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and other MSOs are competing head to head with AT&T Inc. (NYSE: T)'s U-verse TV and Verizon Communications Inc. (NYSE: VZ)'s FiOS TV, the MSOs are teaming up in major markets with the telcos to pitch media buyers local ads that reach entire designated market areas (DMAs).

"In markets where Comcast is the dominant provider, they sell my [ad] time. And in markets where Time Warner Cable is dominant, I’ve joined their interconnects," said Jason Malamud, VP and general manager at Verizon FiOS Media.

Through Canoe Ventures LLC , the major cable MSOs are also teaming up to shop interactive ads that rely on the Enhanced TV Binary Interchange Format (EBIF) platform to media buyers. But it's still not easy enough for advertisers and technology vendors to create interactive ads that can reach the mass cable market, OpenTV Corp. (Nasdaq: OPTV) SVP and general manager of advanced advertising Paul Woidke said. (See Canoe Boots Up Interactive Ad Campaign and Cable Execs Defend Advanced Ad Efforts.)

"The fact that it [EBIF] is a standard doesn’t mean that it's interoperable," Woidke added.

— Steve Donohue, Special to Light Reading Cable

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