TV advertising remains healthy, but platform operators want a bigger slice of the pie. Next year, some will introduce targeted advertising to their set top boxes, promising greater granularity and more effectiveness to marketers.Just like with static display ads online, we have become used to seeing targeted video ads on the web, mobiles and tablets.

Now video ad targeting will come to the living room, when the UK’s two big pay-TV operators will soon start showing targeted ads to viewers in 2013.

The launches could improve effectiveness of a TV advertising business that is still growing strong thanks to its mass broadcast appeal but which could wring out even more dollars by guaranteeing advertiser outlay.
The products
Leading provider BSkyB will trial-launch an NDS Dynamic-powered service to seven million set top boxes under the AdSmart banner by the summer, allowing advertisers to target 90 different demographic attributes. According to Sky:
“Sky AdSmart uses the capability of the Sky+HD set top box to schedule advertisements seamlessly over the linear broadcast stream, when triggered by specified attributes.
“When a break contains a Sky AdSmart instruction, a unique code is sent to all Sky+HD STBs at the precise moment selected in the schedule. Households with matching attributes will seamlessly trigger the playing of an appropriate ad for the circumstances.”
Ads can be pushed to the boxes via Sky’s satellite dishes and stored for later playback. Some 500,000 of the 1.3 million internet-connected boxes Sky has in the market will be used as a viewing panel, recording an ad impression when at least 75 percent of the ad is viewed.
So far, Sky will only get to place such ads in the breaks on its own channels – Sky 1, Sky Sports, Sky Atlantic, Sky Movies, Sky Arts, Sky Living, Challenge and Pick TV. Rival broadcasters like ITV will prefer to keep their ad sell for themselves.
Cable operator Virgin Media says it will also roll out targeted TV advertising, but details are sketchier. Commercial director Mark Brandon says (via DTVE) it will introduce “advanced” on-demand ads on its TiVo box.
The operator will launch a “full-scale” service next year but is taking the prospect “one step at a time”, Brandon said.

The impact

TV advertising is still a healthy medium and is projected by analysts to hoover up more money each year going forward.
Broadcasters already “target” ads by commissioning shows for specific demographics.
Further “targeted” ad initiatives like these will need to prove both that they can target further than the conventional TV schedule, and work effortlessly, to trump the established paradigm.
These launches’ biggest impact could be to establish platform operators, not broadcast networks, as the most more innovative ad targeters.