? Spectrum Reach has relocated personnel to accommodate the demand for political advertising in key areas.
? Following the recent launch of addressable linear advertising in California, the company is beta testing the offering in the New York market.
? As much as $500 million in ad sales could run through the TV planning tool AudienceApp in 2019.
Spectrum Reach, the ad sales unit of Charter Communications Inc., the nation's second-largest cable operator, has completed the rollout of the TV planning tool AudienceApp in 80 markets. In a recent interview, Charter Executive Vice President and Spectrum Reach President David Kline discussed the impact of AudienceApp, which uses anonymized and aggregated viewing data combined with third-party consumer data to target specific consumer groups, as well other aspects of the advertising landscape. Below is an edited transcript of that interview.
Spectrum Reach President David Kline
S&P Global Market Intelligence: How is political advertising shaping up for the midterm elections versus 2014?
David Kline: It's been strong. We're moving traditional customers around to make room for candidates and issues coming our way. It started coming in early, and it’s going to end late.
How does Charter’s footprint map against some of the hot races?
Our footprint is pretty good. We have a lot of battlegrounds this year: Ohio, Florida and California. But having the battleground states isn't enough. We had to pick up our people who do planning, pricing and inventory and move them to different states temporarily to handle all the traffic. We're open 24 hours a day, so we can run every piece of political advertising that we can.
Is AudienceApp part of the political process?
This being new, we didn't open up AudienceApp for political. We're still doing it the old-fashioned way. [Candidates] still love their news networks. There is a lot of activity, and they're spending a ton of money on CNN (US), FOX News Channel (US), MSNBC (US), CNBC (US) and our Spectrum news channels.
Addressable advertising for Spectrum inventory just started in Los Angeles?
Yes, for linear television. We have a couple of auto clients in the marketplace, and it's working terrifically. We're able to do three different [audience] segments and a default. Not only are the [ads] running, but we're getting all the correct reporting back. So, we're well on our way.
What about addressable in New York?
It's in beta in the New York [designated market area] and will be ready by year-end. So, we'll have our two big markets book-ending the country.
Spectrum Reach has a dashboard that serves as a scorecard for clients?
AudienceTrak keeps count of all the impressions we sell and tracks the plans. You can look to impressions from set-top boxes, buys on video-on-demand plans, the Spectrum TV streaming app, the digital impressions and display advertising.
Will it include Spectrum Mobile down the road?
We just got started and don't have a sizable footprint yet, but we want to use that. We feel like we're pretty well-covered on the digital side. That's why I'm not one of those TV guys that bash digital; we have tons of it.
Since its launch, AudienceApp has worked with some 4 million ads with notable categories as automotive, healthcare, retail, legal and real estate. Have any categories surprised you with the new tool?
It's still relatively early days. What is really surprising is the number of cable networks that have popped to the top. Typically, 20% of the inventory accounts for most of the ad sales. That's because there isn't any Nielsen Holdings PLC measurement for many networks. But with set-top box data, you can see there is a lot of viewership for other networks.
With set-top box data we have been able to monetize those impressions. Buys are usually made on five [like] ESPN (US), USA (US), HGTV (US). Now clients are buying 30 networks.
How quickly can AudienceApp build a plan?
In seven seconds. Tell us who the target is. We have tons of data: income levels, education, kids, home ownership and vacation preferences. What networks do you want to exclude? This is set-top box data; we optimize to the audience. It comes through an algorithm; it would take us three weeks to do it by hand.
How about attribution?
We can come back and see how much product was sold before a campaign and afterward. Planning can be changed within seconds. That used to take two weeks.
How important is AudienceApp to Spectrum's overall ad sales?
It's a significant part of our business. Some $400 million to $500 million will run through it in 2019. There are higher optimization rates, and it's a more efficient way to buy. We said we were going to do impression-based plans, and we did. We said we were going to do addressable, and we did that. We're committed to using everything we can to make advertising even more powerful on our platforms.