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Through an agreement with Cablevision, ESPN will reportedly offer advertisers access to set-top usage data for developing targeted ad campaigns.
Cablevision is mining set-top data for new revenue.
In a landmark deal, ESPN will reportedly announce today that it has signed an agreement with Cablevision Systems Corp. (NYSE: CVC) for access to audience analytics and set-top usage data. According to a report by Adweek, ESPN will use the data to offer advertisers insight into consumer viewing habits for the purpose of developing more targeted ad campaigns. The deal will also carry over to ESPN parent company Walt Disney Co. (NYSE: DIS).
Cable companies have long been sensitive to rules governing set-top data privacy, but the industry has grown bolder in recent years thanks to Internet competition. Cablevision was vocal in its recent first-quarter earnings call about making better use of set-top intelligence, and even on partnering with other cable operators to analyze subscriber viewing habits. The company also recently launched a new product called Total Audience Application (TAPP), which helps to automate the planning process for targeted ad campaigns. (See Cablevision Talks Up Internet in Q1 Earnings.)
In a recent interview, Senior Vice President of Marketing Chris Hock at ad tech company BlackArrow Inc. provided some context on operator use of set-top data, noting that pay-TV companies have three options available to them. They can keep set-top information to themselves for proprietary reasons. They can use the data as leverage in licensing negotiations with programmers. Or they can turn set-top intelligence into a new revenue stream by selling it off to content partners.
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Regarding the second option, Hock pointed out that many programmers are looking for the ability to do dynamic ad insertion now in video-on-demand content. That DAI capability paired with detailed information from set-tops on viewing habits can provide a major boost to operators in arguing for lower licensing fees.
As for the third option, ESPN proves that there is demand for direct data access. ESPN President of Global Customer Marketing and Sales Ed Erhardt told Adweek, "We hear from customers all the time: getting access to set-top box data, relative to how [ESPN] is consumed, is vital. Now we've got access to it."
Cablevision President of Media Sales Ben Tatta was also enthusiastic about doing more with set-top data. "It has been the one thing that has held the industry back to a certain extent. There hasn't been this robust data set on television as there is on digital. So, it's in our best interest to make it as available as possible."
— Mari Silbey, Senior Editor, Cable/Video, Light Reading
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