Pay TV market must 'catch up' with Sky AdSmart
Three out of the four big pay TV suppliers in the UK are neglecting to provide enough innovation to develop addressable advertising systems, an industry expert has warned.
Speaking at the 2014 Connected Consumer conference, Nigel Walley, managing director of media consultancy Decipher, said although Sky's new targeted ad platform, AdSmart, was "hugely important", he remained concerned about the rest of the pay TV market's lack of investment.
"I like the UK to be able to be at the forefront of innovation, but what worries me about AdSmart is that it's the only one," Walley said. "There was a targeted program at Virgin, running in parallel to the AdSmart development at one point, but Virgin [sacked the people working on it].
"There is no targeted advertising program in research or development at BT or TalkTalk. So three out of four of the major TV platforms with the data capabilities to deliver innovation around addressable advertising aren't doing it.
"It just feels like Sky are the only people left."
Although Walley said this was good news for Sky, which has a market it can "choose to define", he added it would be much healthier if the other three pay TV platforms could come to the table and start innovating - "both individually, as companies, but also to come together as a group, saying what's best for the UK."
Sky AdSmart allows the company to tailor the advertising it presents to customers when watching content through its platform. Based on information customers provide, some adverts will be substituted with more relevant ones, offering advertisers a much more bespoke and targeted offering.
The platform, which went live in August 2013 in six million households, has been broadly welcomed by the industry and secured a double win on Wednesday evening at the annual Connected Consumer Awards for both 'Best Technology' and 'Best Innovation'.
Judges for the awards described the platform as "extremely clever and innovative" and praised it for using "amazing technology."
Jamie West, director of AdSmart and commercial development at BSkyB, said: "We set out with the ambition to grow the TV ad market - or rather, make TV more relevant to more brands, and I think we've done that."
Of the brands active on Sky AdSmart, half are new to Sky and a third are new to TV. West said that the system is now entering an open market phase as the company adds more targeting attributes, flexibility, channels and devices.
However, Walley said the clear success of AdSmart demonstrates the risk for the rest of the market which he views as lagging behind.
"Having only one company doing addressable advertising on TV is not good because it raises the question about who else will come to the market," he said.
"I think the UK platforms need to get their act together and catch up quick or someone else will step in."
In response to Walley's comments, YouView's chief executive, Richard Halton, said later this month the YouView internet TV platform - a partnership between BBC, ITV, Channel 4 and Channel 5 - will release a new system to allow more targeted advertising. Halton also said he was keen to improve the TV ad trading currencies and was awaiting the launch of BARB's Project Dovetail to help.
ITV's controller of digital products, Jon Block, added: "I think ITV are fully supportive of any innovation in the industry and AdSmart is a great innovation that will be driving the industry forward with YouView quickly in pursuit."
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