Is My TV Watching Me?

“Hey, that one Super Bowl commercial last night was amazing.”

“Which one?”

“You know, the Mr. Clean dancing commercial?”

“Nope, I was never shown that one.”

“Oh…”

mr. clean.gif

Welcome to the future, where different viewers watch different television commercials based on their unique patterns and preferences. While my Super Bowl example is an exaggerated take on the future of targeted advertisements, is this type of dialogue really that far off from becoming part of our future?  By now, most of us are aware of ad targeting on search engines and social media sites, especially Facebook, Instagram, and now Snapchat–those personalized ads that follow you from site to site displaying the new speakers you’ve been wanting. But what might surprise you, and what I find interesting, is that social media is just the first step, and television could be next.

Evolution of TV Advertising

The evolution of TV has changed drastically in the past ten years, especially with the introduction of streaming media around the mid 2000s. While in the past you were limited to watching certain shows and channels when they aired, today we can watch shows on a number of different devices whenever and wherever we want. That being said, when families do watch TV, I want to refer to an example from Think with Google:

“Imagine a family of four watching a football game, with parents watching on the living room TV, college-aged son in the basement watching with friends over a game platform, and little sister keeping an eye on the game on her phone while getting her book report done.”

Google makes the point that while traditional ad buying on television reaches a large audience, it is most likely not going to be relevant to every person watching the ad. The goal moving forward, and what we are going to see continue to evolve, is how to reach different devices and households with more effective messaging.

tv-ad

Addressable Television Advertising

Many companies have been talking about the future of personalized television advertisements, or addressable advertising, for the past few years, but this future might actually occur more sooner than later. In fact, some of these addressable television ads do exist today, but at a small scale. In 2016, targeted television ads consisted of 1.3% of total television ad spend, even though around 50 million, or ½ of households who pay for subscription, can be targeted. This year, companies like AT&T and Times Warner Cable suggest how addressable television advertising will increase due to their $84.5 billion acquisition last year, which gives them access to more customer data and a larger target audience. The two CEOs believe they can accelerate the growth of addressable advertising with their new combined content, scale, and distribution. However, we will have to wait to see if and how fast this acceleration takes places since privacy concerns exist, along with some restrictions. For example, AT&T can currently only use addressable advertising within two minutes of every hour on cable programming. Even as television ad targeting increases with these two large companies, a problem arises if advertisers do not want to place ads for only AT&T or Times Warner customers. Furthermore, as smart TVs and online streaming becomes even more popular, using digital marketing tactics might end up being more effective.

How it Works

Addressable advertising works similar to online ad targeting, with the goal to bring effective digital advertising techniques used on the Internet to TV. Addressable advertising includes a number of factors different from simply age, gender, and geography; these include income, family composition, preferences, and buying patterns. Technology allows TV ads to correlate individual preferences and patterns with use on other devices, such as smartphones and laptops. With the advent of being able to watch any show on any device at any time, companies have the opportunity to collect data on what people enjoy and display the right message that aligns more in tune to their interests. From an advertiser’s point of view, this new type of addressable TV advertising allows them to measure metrics more effectively on each ad, including engagement, conversions, and brand lift. What is really interesting is the type of information that can be analyzed when watching television, including if you shared a post or article during a show, or even looked up the product from the advertisement on your smartphone.

addressabletviconsPros

Contrary to what some think, the benefits of addressable TV advertising are not to annoy viewers, but to create better, more personalized experiences, while marketing relatable products you actually care about. Some other benefits include more engagement, but can also prevent viewers from watching the same commercial over and over. With traditional TV advertising, companies generally buy slots to show their advertisements on certain channels, which is why you might keep seeing the same furniture commercial over and over on HGTV. In contrast, addressable advertising can track how many times someone watched an advertisement to hopefully prevent this repetition from occurring.

commerical

Cons

Opponents of addressable TV advertising argue that what’s great about traditional television is that it offers a medium for companies to spread awareness to the largest amount of people. While traditional television has provided this medium to reach multiple users, proponents of ad targeting suggest that not everyone is in the market for the same product, such as a new car for example. Wouldn’t you like to spend money on effective advertising that targets the right buyer personas who are more likely to turn into leads and purchasers?  Another concern is that as TV advertising becomes more like the Internet, top competitors like Facebook and Google will fight to become more like TV, which is why you might have noticed more videos and ads recently on YouTube and Facebook videos.

ad-retargeting

While I doubt addressable advertising will affect Super Bowl commercial slots any time soon, I am curious to hear if people feel open or against the idea of receiving personal advertisements while watching television. As an undergraduate student about to start working in this world of digital marketing and advertising, I am both interested and excited to see what happens with the future of television.

9 comments

  1. Really neat post! This idea is a total headtrip, I hadn’t even considered it before but it seems very probable that this will happen in some form in the future. I have definitely noticed an increase in the number of ads shown per Youtube video, which has been pretty annoying. Like you said, as time goes on I think we are going to see a convergence of traditional and digital video/advertising, and the end result will probably be somewhere in between the TV commercial break and the online video ad.

  2. Really interesting blog idea! Honestly, the personalized ads are somewhat creep me out. Just last week, I was having a conversation with a friend about booking flights to Des Moines, and a Southwest advertisement for flights to Iowa appeared on her laptop. Not sure how exactly that works, but definitely creepy. I see both the pros and cons to having targeted TV ads, and I think that some sort of mix should be agreed upon. I think that some products may want to have a more wide reaching audience and should be distributed as such, such as a political commercial. Other products that have a more niche market may want to buy into the targeted ads. I wonder if TV providers would be willing to sell different types of commercial slots for businesses, potentially with different prices – assuming a higher price for targeted commercials.

  3. Really content rich post Nicole! That last cartoon really captures what we see so often in group TV viewing in which YouTube has the power to influence consumers and speak on behalf of brands. Of course the irony is that so many videos are preceded by 30 second advertisements that do not have the skip option anymore, so it seems advertisers maintain a level of scrappiness that continues to get the message in front of viewers.

  4. Interesting post. I had not thought about this advance before, but I think it could be taken a step further. With facial recognition technology, the TV could calculated the identities of everyone in the room and make an algorithmically based assessment of which ads to show.

  5. Very interesting post! I don’t see why this wouldn’t be the way to advertise in the nearer future. Traditional TV ads are still targeted based on the audience profile and the time slot they appear in. You won’t see a lot of the same ads on Food Network and ESPN, just as the ads shown at 9AM on either channel won’t be similar to the ads shown at prime time. Advertisers are only limited by the availability of information/technology in order to fine-tune that targeting to the level that you mentioned in the post. I also agree with the point that it might not happen to Super Bowl commercials very soon, since they are created with the purpose to generate buzz across the widest possible audience. After all, we all end up seeing those ads in our Facebook feeds, even if our Likes and preferences are completely different (and I suspect they same will happen for TV).

  6. I’ve had so many similar experiences as Lauren above, where ads that seem to know ahead what my decisions as a consumer will be. Although it might be hard to imagine TV shows doing the same today, I don’t doubt that we will soon be encountering addressable ads to varying extents. My concern aligns with the cons section of your post– if some companies start getting into advertising strategies catered to each household’s interests, it would seem illogical for competitors to refrain from it. That way we would have TV ads as selective and niche as our news feed, so perhaps a system that ensures all “noteworthy” campaigns (public service, social justice advocacy, humanitarian aid, etc.) to be aired could help.

  7. Wow, I’m mind blown right now. I actually never thought or really even heard of targeted television advertisements until I read this post so thanks for sharing such a cool idea. I like how you addressed both the pros and cons of the new technology and I’m curious what the rest of the class thinks because I’m in the middle on if I would like it or not. I’d be interested to see just how quickly this change would take place and I agree that it could be very soon considering the amount of data becoming available on consumers, especially as people become more likely to link their devices across platforms with things such as Smart TVs, Amazon Alexa, Google Home, etc. I always found it awesome how Netflix would target ads to consumers based on the Netflix shows they watched so it’s easy to imagine cable companies being able to do the same. As cool as I think it is, I would worry it could drive up the costs of buying commercials and cable companies would try to increase commercial time to maximize profits.

  8. I personally love the idea of the addressable television and the personalized ad experience. If I was being hit with advertisements that actually held my interest then I would be much more likely to sit through engaged and consume all of the ads. I think that the issue of potentially losing eyes is counterbalanced by the idea that a good spot could be shared on social media/youtube. It is an exciting time to be coming into advertising/marketing especially in media because it is all changing so much! Thanks for the thoughtful post.

  9. Great blog post! I’m a CSOM class of 05 graduate that is currently running the Advanced TV product at a local Boston company (DataXu). Addressable TV (with Dish, DirecTV, Comcast, Verizon and Cablevision) is a great way to reach a hard to find audience on Television. This trend signals the beginning of a shift from traditional TV (One to Many Broadcast) to “new TV” (One to One Unicast) that will be a much more tailored experience to the consumer, but it requires a marketer to be extremely savvy about their use of data and analytics across all devices to make that work. It’s awesome that this class is looking into these topics as we are really just beginning a journey into the future of data driven marketing today. I’m happy to chat more about it with the class if people are interested in learning more about marketing tech and ad tech.

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