Dish Network to Launch Ad System

Dish Network, working with WPP’s GroupM and advanced TV technology firm Invidi, will launch an addressable advertising system over the satellite network later this year or in early 2010, according to sources familiar with the plans.
 
Word of the new service follows by one week the decision of Canoe Ventures to put on hold plans it had to launch an addressable ad system in the second quarter of this year.
 
While the GroupM-Invidi service will start with Dish, it is expected that competing satellite carrier DirecTV, which recently signed an agreement to utilize Invidi addressable technology, would also join as a distributor after it deploys the equipment it needs to participate, sources said. The timing of DirecTV’s participation is unclear, although it probably wouldn’t be before mid-2010, per sources.
 
Unlike the now-scuttled Canoe plan, the Dish-Invidi-GroupM service would offer household-specific addressability through a system storing hundreds of targeted ads in individual digital set-top boxes with DVR capability. More than 6 million Dish households currently have digital DVR-enabled set-top boxes, per sources, although a Dish rep would only confirm that the network’s total subscriber count stands at 13.6 million.
 
GroupM, Invidi and Dish declined comment on specifics of the new addressable service or else didn’t return calls. But other agency executives applauded the move. “If they do it correctly and send individual ads to individual homes we’re starting to make some major momentum,” said Tracey Scheppach, svp, video innovations director at Publicis’ Starcom MediaVest Group.
 
One source indicated that GroupM clients would likely receive a window of exclusivity for buying addressable ads on the Dish service but that after a certain period, all advertisers would have access.
 
Scheppach, however, said that it was her understanding based on conversations with Dish that the service would be open to other agencies and their clients. She did note, however, that SMG receives exclusive access in addressability trials it is conducting with Comcast, including the ongoing Baltimore test that also uses Invidi technology and an upcoming trial in an undisclosed Comcast market that will use addressable technology from competing supplier Visible World. “Maybe it’s payback time,” she quipped. SMG is also involved in an ongoing test in Brooklyn, N.Y., with Visible World technology. 
 
How quickly the Dish service grows could depend on how rapidly DVR households expand. Currently, DVRs are in about 33 percent of U.S. households, according to the Nielsen Co.
 
The service has been in the works for over a year and the partners hope to make it nationwide within two or three years. GroupM, the media management arm of WPP that oversees Mindshare, Mediaedge:cia, MediaCom and Maxus, has an investment in Invidi and its global CEO, Irwin Gotlieb, sits on Invidi’s board of directors.

 
Other investors in the company, which was founded in 2000, include Motorola, Menlo Ventures and Enertech Capital, among others.
 
Meanwhile, Canoe, a venture among six major cable operators, has said it would focus on interactive ad technology — crafting messages that allow viewers to drill down for more information by clicking an icon with their remotes — with the expectation of delivering a service before year’s end.
 
But ad executives say addressability is the real key to unlocking efficiency in the advanced TV advertising world. “Interactivity is nice, but your have to hit the right target with your message first,” said the CEO of a major ad buying firm. “Do that first and then if there is interactivity, even better. But if I hit an 80-year old grandmother with an interactive message that is targeted to a teenager she is not going to interact.”
 
Commenting on Canoe, Scheppach applauded the company’s decision to pull the plug on its so-called “community addressable messaging” system after discovering certain operational flaws that make it impractical to use, such as long lead times for scheduling ads and the fact that addressable spots could only be inserted after local breaks.
 
Others agreed. “I give [Canoe CEO David] Verklin a lot of credit for pulling the plug on a plan that wasn’t going to work,” said one media agency CEO.
 
Scheppach said she hopes Canoe focuses on household addressability when it does revisit the issue, and not the “community” level approach offered in the scrapped version. “If it’s going to be this hard, don’t make it a small improvement,” she said. “It should leapfrog the current offering.”
 
Others think Canoe ought to do a deal with a third party provider like Visible World or Invidi instead of trying to develop addressable technology in-house. “Could their engineers do it? Sure, but do they want to spend several years doing it when the technology already exists?” asked media agency executive. “There is the cost of lost opportunity.”
 
But according to an internal memo at Canoe, the company remains committed, for now, to an in-house solution centered on community systems. “A mutual decision was reached,” the memo said, to develop a “more flexible version of CAM,” for future deployment.

Nielsen Business Media