Boost your sales through adaptive TV advertising with David Sanderson, Director of Sky AdSmart

Despite the rise of social media advertising, David explains why TV is still the most effective form of advertising there is.

They also discuss, in detail, how Adsmart works compared to traditional TV advertising; how you can use Adsmart to reactive lapsed/lost customers and how, using the same data sources we use at Machine Labs, you can target very specific groups of people with your smart ads.

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Andrew Veitch: Hello, and welcome to The Joy of Marketing with me, Andrew Veitch.

Today we’re going to be talking about one of my favourite subjects, which is TV advertising.

I’m delighted to be joined by David Sanderson from Sky TV, who’s joining us from London. David is the Director of Adsmart, which is one of the things we’ll be hearing a bit more about today.

So, welcome to the show.

David Sanderson: Thank you, Andrew, nice to be here.

AV: Isn’t TV advertising a thing of the past, now we’ve got YouTube and Tik Tok and reels on Instagram, and we’re all on Netflix and, you know, all of these other new mediums?

DS: Yeah, I guess, I don’t mean to dismiss the significance of social media channels like like those, but what’s fascinating is when you look at the data, that TV viewing today is higher than it was in 2010, which is roughly when smartphones kicked off and the social media channels that it spawned got going.

So it surprises a lot of people but TV is very much vibrant and bigger and better than it ever was and part of that is due to the likes of the sort of investment that the likes of Netflix have put in, which has encouraged everyone to up their game. And there’s just amazing stuff to be to be watched on screen.

I think if you’re, if your question is, is it, is it something from yesteryear in terms of an advertising platform, I think the answer in that is it is in the area of people’s willingness to be advertised to. Social media is fantastic for the for exactly that, but in terms of an advertising platform, it’s quite easy to dismiss and avoid ads on it. And we know as being one of the biggest ad spenders in the country that there is it it’s pretty hard to get cut through in that environment and when you look at the sort of five hours of video that people in the UK watch every day and distil that down to how much of that is actually advertising on on a screen that’s that’s willingly watched, it drops to a fairly measly 20 minutes and TV is the vast majority of that, still.

AV: I do wonder actually, if maybe because people are spending more time at home, you know, because of COVID and with probably increase of home working, I wonder if some of that is actually driving some of the increased viewership?

DS: Oh, yeah. I think COVID was, there was a silver lining on the COVID Cloud for television.

I mean, it’s, it did increase in 2020 and, and stayed up at those levels. But it wasn’t a huge jump, you know, it was a marginal increase on a fairly sort of solid performance.

I do think that the two things, the likes of Tik Tok and so on and so forth are good bedfellows with, with TV because as many people listening to this will acknowledge, you know, we increasingly dual screen. And that you might be prompted to do a quick bit of research on who particular star of a particular show is, or what brand is what in terms of what they’re offering that you might have been, might have just seen on screen.

AV: Yeah, and it was for a lot of people, it’s part of the habit isn’t they come home, they switch the TV on, it’s on in the background, they’re not necessarily always completely engaged with it, it’s more just providing some some background to their life.

DS: That, that’s true, but equally, certainly in the multi channel environment where people have an abundance of choice and are picking channels from that wealth of different options that really do something for them. Very often, they’re engaged in content that really matters to them and if that’s live content that makes, presents it as a really compelling advertising opportunity. Or if it’s highlight content for them, that that, they don’t want to record and fast forward through ads because they want to watch it live so they can coordinate comments with their friends also watching at the same time, then that becomes really quite compelling.

So I think it’s a lot less background than it perhaps was, I think it’s more about just a series of appointment views that matter to people.

AV: Okay, so moving on to advertising perhaps just before we go into, you know, some of the new features, it might just be useful to cover off how things work under the traditional system.

So just as an example, let’s say I’m an advertiser, and I was wanting to target, you know, a female 16 to 34 year old audience. How would I go about that?

DS: Yeah, I guess it’s an audience that all of the major broadcast players in the UK are very good at reaching. So you would probably commission an agency to put together a combination of content across ITV, Channel 4, and, and Sky to deliver about 400 ratings, each each rating is 1% of that total available audience and that should give you a really good reach and frequency across it. And you might supplement that with a bit of catch up, which increasingly younger female audiences like to watch, which is an opportunity to advertise in as well. And then you probably supplement that with some digital and social and that would give you I think, pretty, pretty impressive coverage of most of that audience, given how much content they willingly engage with.

AV: Great. And of course, you know that that was the old method.

But could you just tell us a little bit about Adsmart, and how that works?

DS: Yeah, I think well, sticking with your analogy of an advertiser trying to reach a 16 to 34 female audience, there’s bound to be some that are lighter TV viewers than than others. Every audience will have its heavy and light, third, and an average third sitting in the middle. And where addressable media comes in is that it will effectively guarantee to reach what audience you, you want to reach. And if they don’t, if it doesn’t reach that audience, you won’t pay for it, by popping up in, in content that we’re in whatever content they choose to watch across a vast array of channels.

So it’s a really good way of extending reach from a sort of mass market, mass audience campaign across multiple linear campaigns to pick off viewers who are a bit more elusive and harder to pin down in whatever content matters to them.

AV: Great. So if, so, in other words, if I’m in this target audience, and I’m at home, watching on my Sky box, watching the same programme, as as somebody else, I might see different adverts to that other person?

DS: You ,you, you would and increasingly you do Andrew, you may not be aware of it, and suspect you’re not 16-34 female, but any audience that anyone is after will, effectively it allows them to use all the granularity and cleverness of digital targeting but to deliver it full screen in high definition content that that individual household has decided is right for them at that moment.

So it could well be that if that particular piece of content is the new HBO winning time drama on Sky Atlantic, then if in one household, the audience you’re after, is watching that, and the next door households watching the same stuff, but as in a different demographic than they will see different ads at that time.

Essentially, we’re dynamically inserting ads into linear or live content, where the targeting requirements are met, and where they’re not met, that household sees what everyone else will see.

AV: Right, and then obviously, just from a tech side, and I will just sort of go into the British system here briefly. So in Britain, we’ve obviously got the broadcast over the air, we’ve got Virgin Media, and we’ve got Sky boxes.

So what, which of these platforms is can you can we actually switch the ads around on?

DS: It’s in the Sky and Virgin homes.

So that’s just under 50% of all homes in the UK. We need some fairly clever middleware in order to deliver the Adsmart technology and each box will store up to 400 different, little different bits of ad copy. The end user the household in question is oblivious to that fact, it doesn’t compromise the way their box works, but it just means that based on the targeting profile of the household and I stress it’s household, and nothing that would breach any personal data regulations in any territory, and the ad just sits there waiting for an opportunity to be played in that break perfectly superimposed frame for frame over an ad that will otherwise have been seen. The ad that would have been seen isn’t buying the right to market that specific household, they’re buying mass audiences and they’ll get that lost household back in the broader scheme of things, but, but advertisers who either have a real need to avoid excessive wastage either because they’ve got a very tightly defined demograph that they’re after, or they’re keen to restrict their advertising to a very specific bit of geo-targeting that might be postcode, or a city, or, or a county, or very often both, i.e totally defined demographics within a clearly defined area, then then Adsmart’s the thing for them and that’s that’s increasingly why advertisers are turning to us.

AV: Great. And actually, just before we move off the technical side, can I just check what TV stations this is on? Is this just with this just be the Sky branded stations or or is it a bigger choice?

DS: It’s a much bigger choice, thankfully.

And that’s partly because Sky media is, I think, either the biggest, or one of the biggest TV sales houses in the world. I’m not quite sure what metric we’ve used that on. But we’ve we represent well over 150 different channels that broadcast on the Sky, satellite platform and Virgin Media, and about 130 channels have embedded the Adsmart technology in order for them to be part of this ad smartable TV club. And that includes, obviously all the Sky wholly-owned channels, but it’s all of Viacom’s channels, so Channel 5 and MTV. It’s the full suite of Discovery Channels, National Geographic, History, lots and lots of others.

And the reason that’s important to get across is because people would traditionally think, okay, well, I think I know who my audience is, and therefore I think I know what they watch, and therefore I’m going to buy some airtime in shows on channels we think they like in the hope that the those two things intersect – potential customer and ad message.

And in this environment, none of that needs to happen. If you just need to focus on what’s the most exacting profile of your potential customer that we can identify, and as long as we can match that, then we’ll stick your ad in their Sky or Virgin box, and the ad will appear in whatever content that matters to them, from that very large list of channels.

If any one of those households, decides not to watch any of them, or religiously watches the BBC only or sticks with Netflix and nothing else, then we won’t serve a single impression in that home and that and that advertiser won’t pay for that home. But the reality is that people do have a fairly complex blend of content that they dip in and out of and when they engage with one of the Adsmart multiple channels, they’ll see that ad.

AV: And it’s interesting. So obviously, earlier, you mentioned that one of the targeting options would be postcode, or location. I mean, what other ways can an advertiser target a particular audience?

DS: Yeah, the targeting array, again, driven by how good digital platforms are at targeting, we’ve had to really get to that threshold. And we’ve got about 1200 different targeting options, which sounds a bit daunting, but for example, 66 of them are using Experian data and Experian types, and many people around the world will have heard of Experian, and it’s a pretty popular data source.

But there’s lots and lots of other classifications that fall into broadly 10 different targeting buckets that might be based on finance profile, on a, on a level of comfort that people do or don’t have with technology, whether they’re senior decision makers in companies, what cars they own, what what sort of financial profile they might have. So there’s lots of different ways to, to look at it. And we can usually get particular advertisers, audience ambitions met exactly, or get pretty close.

AV: Well I have to say, I obviously happen to know quite a lot about it, because the Experian data source account and TGI and YouGov are also the same data sources that I use in Machine Labs. And it’s, it’s quite incredible what you can get down to I mean, we can see a size of household I think on both platforms; as you said income, even things like the likelihood of owning a dog or the likelihood of owning a cat. Although obviously can’t specifically say that somebody owns a dog or a cat, but you can see, they’re more likely to own a dog than than other audiences.

DS: Absolutely.

And that’s that’s we’ve had a huge sort of boom in pet food and pet care related products since, since COVID and that’s been really helpful.

And other ones that are really interesting is there’s some fairly obvious life changing moments that most people will go through at some point that then has a direct impact on their purchasing behaviour. So if you’re about to have a baby, or you’ve recently had a baby, you’re in market for products that you clearly wouldn’t be if that particular life changing moment wasn’t on the agenda. And the same for moving house, we do huge amounts of work with businesses to do with either furnishings or home improvement and, and that tends to peak just as people move into their next property

AV: I suppose another obvious one is again, whether or not the consumer has a garden. Because again, there’s obviously a lot of products that are only of interest to someone with a garden. So again being, particularly as you’re so many of us live in flats now, to actually be able to choose the people with gardens I can see would be would be something valuable to a lot of advertisers.

DS: An interesting one in that respect is around electric vehicles, which is a very topical issue. It’s pretty, pretty difficult, potentially almost impossible to own an electric vehicle if you don’t have your own driveway, so if you live in a flat or a terraced house, you’re not really a market for an electric vehicle, anytime soon. So that sort of segmentation based on housing type is an interesting filter to add to that market.

AV: And I guess in terms of the use of this, I mean, the the obvious way, is using it to recruit new customers.

But just as I’m thinking about it, I suppose this could also be used to you know to reactivate existing customers who haven’t bought for a while.

DS: Yeah, we do, do work with customers where we either specifically go after a database of households addresses that they own and have rights to use, that might be lapsed customers. We, we’ve done a lot of work with insurance providers who know that, for example, next month, they’ll know that there is a great many people that requested a quote from a particular insurance provider and declined it and went somewhere else; so they know that next month is the time to go after that list of declined customers. And in any particular audience, roughly 45% of them will be customers of ours as well. So there’s a significant chunk of, of lapsed customers that we can help reignite.

AV: I mean, are there any particular campaigns that you can tell us about?

DS: Gosh, so many I mean, there’s, there’s, you know, we’ve we’ve got 1000s of customers, I’m pleased to say. We’ve got plenty that are quietly enjoying the success and not very keen to share news with with others, but thankfully, a few have.

We can pick lots of flashy brands like McLaren or princess yachts, and some big spending finance brands. But I think a good run of the mill, and I don’t mean to disrespect a very valued client by describing them as run of the mill, but there’s a car dealer in the west country called Vospers, who’ve been around for many, many, many, many years. They’ve been a long term, supporter of regional ITV, which they continue to do, quite rightly.

But Vospers ran a campaign with us late last year, and saw a 34% increase in sales, which was worth an incremental £5 million of sale value and because uniquely addressable, TV can link the address of obviously our viewing customers back to a customer who would have given their address to the advertiser in question, which course you do when you buy a car. We could link it directly to 432 car sales, which is the sort of 5 million quids worth. And that was on the back of a campaign that costs just over £10,000.

So, so we like that one because, you know, Vospers’ midmarket car retailer, they, we love them dearly, but as they would admit they’re not wildly different from plenty of other mid market car retailers. And they’ve been on TV a lot before so you’d thought they’re probably maxed out that audience but the the reach and impact that we can deliver in multi channel homes, has clearly paid dividends in that example.

AV: So obviously, the majority of direct to consumer websites don’t advertise on on TV.

Could you just give me sort of an indication of what would be a typical minimum budget to get started on Adsmart?

DS: Yeah, I think as a as a good example, if if you looked at a particular market in the country, where there might be a couple of 100,000 households, half of those, roughly speaking could be reached by sky or Virgin. And because of any particular advertisers targeting requirements, you might reasonably think that 80% of those homes are going to be irrelevant, they’re going to be too old or too young, or they don’t own their house or they do, whatever the filter is that matters, you’ll find that usually 80% of any audience you may be quite keen to avoid spending money on reaching and you just want to focus on that core 20%.

So in that instance, we’ve got 20,000 households that matter to this advertiser, we’d we’d run a campaign where if we would guarantee a frequency target, let’s say for the sake of easy math, the frequency target is five. So we’re going to deliver five, the ad five times in 20,000 homes, which gives you 100,000 impressions, and at a cost of 1000 of about £50, let’s say that’s 5000 quid as an example for a campaign costs.

Now, campaigns can cost much, much more than that it’s entirely binary with how many homes you choose to target, but the lowest we go, is £3000. The average is pretty much what Vospers, the car dealer, did spending spending £10,000

AV: I guess, obviously, the price of putting together a TV advert has absolutely plummeted. I certainly remember when I started out you need to have these staggeringly expensive cameras and this huge crew whereas now you know, tiny little mini camera probably does a better job.

So I’m guessing what you could maybe do film a TV ad for maybe £5000 nowadays, would that be about right?

DS: I would say that’s a very, very good and probably, you know, comfortable estimate. And of course, they’re not just filming a TV ad, they’re putting together a suite of video assets that you can use on your website, your YouTube channels. And from that they’ll craft a 30 second version that you can run on TV.

So yeah, we were we’re blessed to have working relationships with with hundreds of brilliant small production companies dotted around the country that really understand local SMEs businesses and in a way that certainly Sky’s creative team either couldn’t or wouldn’t be wouldn’t have the resources to do it. So yeah, lots of brilliant ad copy being made. It’s incredibly well, for surprisingly little cost,

AV: Let’s say over my career, I mean, I think the cheapest ad I filmed is probably about £5000, and I think probably £100,000, for the most expensive. But it certainly wasn’t the case that the £100,000 ad performed 20 times better than the £5000 ad. So it was maybe not always a popular view, but I probably am inclined to put more of the budget into the media than I am into into the production.

I’m sure I’m preaching to the choir, on that one.

DS: You are. But I mean, you’re but you’re right. I mean, you know, the great thing about television is, and going back to your original point about about Tik Tok and other social channels, is that people remember TV ads from not just yesterday or last week, but from last year or from 10/20 years ago. And the ads that people remember weren’t necessarily big budget ones, they were ones with really clever scripts, simple ideas that just land with people. And this is why we work with creative specialists, because they’re brilliant at that, and coming up with messages that really resonate and people, you know, sing when they’re walking around, or act out with their friends in the pub or whatever it might be.

But, yeah, good, high quality, low cost ounces, thankfully, a real enabler to helping businesses take full advantage of addressable media.

AV: Thank you very much, David for taking the time to talk to us.

Machine labs is a great complement to Sky Adsmart. We actually use a lot of the same data sources such as Experian, Canta, TGI and YouGov. Although obviously, for us, it’s mainly used to target and personalise emails, rather than to decide what TV ads you see. You can also use Machine Labs to identify the groups that perform best for you so that you can tell Sky which mosaic groups and types you’d like to advertise to.

Machine Labs is on the Shopify app store, or there is an API for other platforms. Thanks for listening and see you next week on The Joy of Marketing

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