Comcast Advances With Targeted Ads

The ad sales arm of Comcast Corp. (Nasdaq: CMCSA, CMCSK) and a top media agency have picked Baltimore as the site for a new round of "addressable" TV ad trials that target spots to consumers based on anonymous demographic data.

The MSO's Comcast Spotlightdivision and Starcom MediaVest Group (SMG) has decided to move ahead on the new trial, slated to begin in the third quarter, following some results generated from a similar test conducted in Huntsville, Ala. (See Comcast Expands Ad Trial.)

Comcast teamed with OpenTV Corp. (Nasdaq: OPTV) on the Huntsville trial, which involved about 8,000 digital cable subscribers. The operator plans to hook up with Invidi Technologies Corp. for the test slated for later this year.

The moves come as Comcast and other major cable operators look to build a common advanced ad platform, code-named Project Canoe, with the goal of preventing more advertising dollars from slipping to the Internet. (See Who's Rowing 'Project Canoe'? and Plugging the Ad Drain.) Comcast has already disclosed its plans to spend as much as $70 million this year on a new advanced advertising infrastructure.

Starting in December 2006 in Huntsville, Comcast tapped SpotOn, an OpenTV advanced ad system that switches video ads at the set-top level. Under that model, multiple ads are delivered to the box in a given spot window, but the set-top sends through just one of the ads based on what's believed to be the most relevant for the household. The choice is based on anonymous viewership information gathered by Comcast and TNS Media Research.

According to people familiar with the trial, SpotOn sends up to four ads to the set-top at the same time (so it's a big bandwidth eater). Ads vary by demographic: families with children, families without children, income greater than $100,000, etc.

It's also believed that the trial in Huntsville, completed last month, used a digital program insertion (DPI) system from C-COR (now part of Arris Group Inc. (Nasdaq: ARRS)).

Comcast and SMG said consumers in the Huntsville test tuned away 38 percent less often than cable subs that received non-addressable ads in the same time slot. The MSO said thousands of ads were delivered across eight "popular" (but unnamed) cable networks during the trial. Seven SMG clients participated in the test: General Motors, Discover Card, Hallmark, Kraft Foods, Mars, Miller Brewing Company, and Proctor & Gamble.

TNS also claims that the trial demonstrated a 56 percent greater efficiency, the result of sending ads only to "relevant groupings that the advertiser wanted to reach." TNS based that finding on the per-spot costs associated with addressable and non-addressable ads.

Invidi's Role in Baltimore
Other than the selection of Invidi (see our profile), Comcast Spotlight did not tee up much detail about its plans for Baltimore. Disclosure of a trial agreement is certainly good news for Invidi, which picked up a $25 million investment round late last year, as well as recent "strategic" investment from Motorola Inc. (NYSE: MOT). (See Invidi Scores Big in C Round and Motorola Invests in Invidi.)

Invidi's Advatar platform appears to share many traits with SpotOn. The company describes Advatar as a "viewer inference engine," a proprietary set-top application that uses demographic data and records whether an ad was watched. All demographic targeting decisions are made within the domain of the digital set-top.

In addition to Motorola, Invidi also has partnerships with other vendors that provide digital video gear to cable operators, including Arris, Cisco Systems Inc. (Nasdaq: CSCO), Scopus Video Networks (Nasdaq: SCOP), and BigBand Networks Inc. (Nasdaq: BBND).

— Jeff Baumgartner, Site Editor, Cable Digital News