Sky's tailored ad offering was mentioned in a call with analysts delving into the pay TV broadcasters financial outlook last week, as an example of building on the power of linear TV advertising.
Sky AdSmart will deliver different ads to different households based on the information provided by Sky customers, such as age, location and household composition.
From June 2013, a few dozen ads from 30 to 50 brands will be sent via satellite to subscribers Sky+HD set-top boxes. Based on the information that Sky customers have provided, relevant ads will then be seamlessly inserted into live broadcast streams.
For example, a car firm may serve a people carrier ad to a family, but a sportier model for homes with younger customers without kids. Or advertisers could also focus on specific locations or postcodes, opening up TV advertising to regional businesses, eg car dealerships or local florists.
The Sky AdSmart roll-out will then be extended in early 2014 to move beyond the initial launch advertisers, through a development .
The imminent launch follows more than three years of communication with Sky's TV customers, who were first given details of the benefits of the personalised service. The satellite , in March 2011.
Through every step, Sky has been keen to stress that all customers have the option to opt out of the service if they wish.
With the exception of sports and news, Sky AdSmart will be made available across all wholly-owned Sky channels, including Sky 1, Sky Atlantic and Sky Movies.
Ben Cockrell, group strategy director for data, MEC Global Solutions
"There's a huge amount of waste in the traditional TV advertising model. AdSmart is an important step along the journey of trying to achieving greater relevance and efficiency within this space. This is good news for brands, broadcasters and consumers alike.
"It is a logical next step for Sky to tap into online behaviour to drive even greater personalisation and relevance, and they are well positioned to do this.
"We are heading in the direction whereby brands can track individual consumer behaviour across multiple channels and use this to advertise with the right message, via the right channel at the right time based on individual consumer needs. This will rapidly become a hygiene factor as greater ad relevance drives up the costs of communicating to the right target audience.
"Privacy is clearly a hot topic at the moment as consumers are rightly worried about how their data can be used. The privacy argument can ultimately only be won by giving consumers full control of their own personal data and allowing then to trade it in return for more relevant content and targeted offers and hence value from brands. The technical capability to do this effectively across all media channels is still a few years away."
Jason Cromack, chief executive officer, Lateral Group
"AdSmart is the first step in the natural evolution of TV advertising, and BSkyB is maintaining its position as a leader in the space by introducing the service. The movement of consumers away from traditional TV to digital mediums means ads beamed into the public’s homes will need to get smarter.
"With the proliferation of big data, tailored, highly-targeted ads have become a feature of the online shopping experience, and with advertisers looking to increase the efficiency of their marketing activity. With the introduction of a service like AdSmart to our screens, brands now have the chance to develop fully integrated campaigns that target the consumer in the right way.
"Ultimately, with any targeted offerings, the real challenge remains educating the consumer on the benefits that come with this technology. The hyperbole in the media that surround the use of data has led to a lot of trepidation about a more personalised service and conjured up images of an Orwellian future.
"However, by helping consumers understand the benefits, personalised ads can forge effective customer relationships that will see services like AdSmart become the norm. Part of the trick for advertisers using these systems is to produce strong creative that really engages its audience. Consumers have the right to be remembered and to really benefit from highly-targeted ads, but the trick is making them appreciate it."
Amanda Phillips, managing director, Volume
"While targeted advertising is nothing new, AdSmart looks set to be a fantastic opportunity for B2B marketers. This type of highly-personalised activity enables people to view advertising more holistically, from a personal and work perspective, tailored to their viewing preferences.
"I will be interested to see how marketers can capitalise on this by working with targeting companies to create more localised advertising activity based on people’s interaction with brands and their services.
"It’s an unprecedented opportunity for B2B marketers to reach decision-makers outside a work environment and engage with them on a more personal and relevant level."
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