The Basics: What Is Sky AdSmart?
Sky AdSmart is a new kind of TV ad-serving technology that’s now being offered by Sky. Most of us are aware that when we watch Video on Demand (VoD) the adverts may be tailored to us based on our viewing history, location, and other attributes. However, when we’re watching linear TV we all see the same adverts, whoever and wherever we are. Sky AdSmart attempts to offer media planners and advertisers the chance to cherry-pick their audiences based on pre-determined attributes and serve adverts through a Sky+ box to specific households. This means that one household watching an ad break could see different adverts to another.
Advertisers can segment their audiences using Experian consumer profiles, and combine additional attributes to build up very specific profiles. These includes factors like age, location and life stage. Sky AdSmart is traded on a cost per impression (CPI) basis and is currently available in a fifth of all UK households. The idea is to open up TV to advertisers that have previously found the media channel to be a poor fit, whilst at the same time allowing existing TV advertisers to include a highly-targeted element to their media plans.
Sky hopes that it will mean niche brands, small and medium-sized businesses (SMEs) and location-specific advertisers are tempted into TV advertising for the first time. It’s been many years in the making, and at the moment Sky AdSmart is available on Sky 1, Sky Living, Sky Arts, Sky Atlantic, Sky Movies, Sky Sports, Challenge, and Pick.
Segmenting the Audience
So what audience segments can advertisers using Sky AdSmart choose from to have their ads served to? Firstly, there are Experian Mosaic groups such as Suburban Mindset, Careers and Kids, Liberal Opinions, Upper Floor Living, and Active Retirement. These groups are collections of consumers pooled by behaviours and lifestyles. On top of this, advertisers can segment based on life stage, financial strategy, region, affluence, and household composition. Sky is keen to stress the endless amount of combinations of attributes to choose from. However, the more specific the audience profile, the smaller the population that the advert can be served to.
The Argument For Sky AdSmart
- Precise Targeting
Sky AdSmart allows advertisers to target exactly who they want using a previously mass-market medium and they can be sure that their intended audience has viewed their adverts.
- Seamless Integration
The viewer won’t notice anything different when watching their TVs and adverts are served and slotted into breaks without altering the existing viewing experience.
- Guaranteed Impacts
Adverts will only be served when the intended audience is watching, no matter what channel or programme that they’re viewing at the time, meaning an advertiser doesn’t have to select a channel or programme.
Sky explains its AdSmart technology in its own words.
The Argument Against Sky AdSmart
Sky AdSmart is sold on cost per impression which changes based on the audience profiles are selected, but media agencies are already acutely aware of the large premiums that Sky are currently charging advertisers to use the service.
- No Positive Wastage
TV is a superb medium because of how it broadcasts messages to the masses and can influence audiences that you might not have initially identified as the target for your brand – Sky AdSmart eradicates the possibility of this happening.
- No Postcode Targeting
Advertisers can only select audiences based on TV regions or metropolitan area, whereas the ability to serve ads to specific postcodes would open up the TV market to an even bigger pool of potential advertisers.
- Live Broadcasts Only
There is a large shift in viewing figures towards VoD and catch-up TV, but Sky AdSmart can only serve adverts during the first initial live broadcast of programmes.
- No First in Break
For some advertisers it’s imperative that their agency can guarantee them a Position in Break (PIB), but Sky AdSmart is unable to serve adverts in the first slot of a advert break for technical reasons.
Which Advertisers Have Used It So Far?
Over 100 advertisers have signed up, over 700 campaigns have been run, and over 200 audience combinations have been targeted. This has resulted in 165m Sky AdSmart ads being viewed in the last 8-12 months. These advertisers include Audi, RBS, Tesco, Littlewoods and American Airlines.
Audi – already a big TV advertiser – decided to target “very high-affluence viewers” using Sky AdSmart. It found that viewers were 10% more likely to agree that the ads felt “more interesting and relevant to me” when compared to a standard audience, showing how the technology can help to reach specific populations within a target audience. East Coast Trains also used Sky AdSmart to target homes in Newcastle, Sunderland and Edinburgh. What’s unique about this campaign is that different creatives were served to each city and tailored for each geographic region. East Coast Trains reported a 26% increase in online sales when compares to its normal linear campaigns on TV.
What’s Next for Sky AdSmart?
The most likely scenario for the upcoming year is that media agencies will encourage brands to test Sky AdSmart and see if it works for them. Whether the technology has a bright future depends on the reliability of the technology and the ability of Sky to give brands in-depth reports about whether the service can truly provide a good return on investment. I feel like the delays in its development meant that upon launch the technology already felt outdated. However, whereas I don’t think advertisers that already have high expenditure on TV will benefit from adding Sky AdSmart to its media plans, smaller advertisers will.
It ultimately comes down to cost, but if I was an SME that sold products only in specific UK regions, I would see Sky AdSmart as a great opportunity. It would allow me to target exactly who I want with minimal amounts of wastage, and most importantly would elevate my brand above other local advertisers. Viewers would see my brand on TV, and since TV advertisers are traditionally high budget, it would certainly benefit from a prestige effect.
Sky AdSmart therefore has the potential to turn the whole TV industry on its own head, but I don’t think that this potential will be fully realised any time soon. By the time that happens, a newer more innovative technology is likely to give it a run for its money.