Ads Targeted At You Are Coming to Your TV

You are what you buy. At least as far as advertising is concerned. And one reason that the internet will soon surpass television in terms of ad revenue is because it is able to deliver more specific audiences for more specific products.

Where you live, how old you are, your household income, your religion, race, gender preference or ethnicity: all are means to an end, and the success or failure of that end depends on whether there is a Ka-Ching! in the digital cash register after they've paid to have you watch whatever it is they're pushing.

But TV is catching up and soon, perhaps sooner than you would like, the ads appearing on your television will be there because someone has analyzed your proclivities and has research suggesting that white males between the ages of 25 and 35 with incomes between $50,000 and $75,000 who like to dress up while watching football games like your product enough to buy it. Repeatedly.

Is this intrusive? Eh, hard to say. Is it creepy? Could begin to feel that way if what too many people are seeing on their screens seems like a more than casually coincidental reflection of their toothpaste or beer choice. Repeatedly.

The potential danger is that this limits people's exposure to new products, services and ideas, narrowing their options and their worldview. And given the co-evolutionary nature of technological development it seems likely that programs designed to offset the commercial advantage will emerge. In the meantime, however, if you are a bacon-loving female urban dweller whose favorite color is chartreuse, we may have a product just for you...JL

Steven Perlberg reports in the Wall Street Journal:

"In the inventory we own, there might be shows that do well for Cheez-It and not Special K and vice versa. Really what we care about more than their age and gender is: Do they buy it or not?”
The marketing minds at Choice Hotels International Inc., which owns Comfort Inn and Sleep Inn, used to figure that ABC’s “Good Morning America” was the primo spot for advertising to would-be travelers.
Now they also like reruns of “Big Cat Diary” on Animal Planet, where they can reach a similar audience for a lot less.

In getting to that conclusion, they are taking a page out of digital advertising’s book, using new sets of data to help pinpoint viewers with much greater specificity than the traditional demographic categories of age and gender. A new crop of tools from companies such as Simulmedia Inc., Nielsen Holdings NV, Rentrak Corp. and TiVo Inc. has sprung up to apply the lessons of “Big Data” to television.
As the rise of digital and mobile advertising threatens to yank ad dollars from the big cable companies and broadcasters, networks and marketers hope the new technologies will have the ability to leverage huge databases on what products consumers buy and which obscure shows they watch, making the television ad landscape more like the online one.
“If you can do this now with television, you prevent people from moving to what they consider to be a more measurable approach,” said David Poltrack, chief research officer for broadcaster CBS Corp.

ENLARGE

Choice Hotels uses Simulmedia, an advertising-measurement company that collects set-top box data for 50 million Americans to help companies target consumers watching “long-tail” cable inventory, that is, shows that are generally cheaper than prime-time hits but carry niche viewers. “Good Morning America,” for example, sells 30-second spots for about $43,000, compared with $650 for an ad on Animal Planet during the early morning, when “Big Cat Diary” airs, according to media cost forecasting firm SQAD.
Choice Hotels spends 5% to 10% of its TV ad dollars buying these kinds of data-targeted audiences, according to Robert McDowell, senior vice president of marketing and distribution. The reason? A show like “Good Morning America” offers a mass audience, but targeted buys like “Big Cat Diary” add some precision. Simply put, you pay a lot less and you know the right person is watching.
In recent years, politicians have similarly employed new analytics firms to determine which programs to buy to reach voters who might be swayed, a shift that has revolutionized the campaign-ad market.
Marketers have long purchased TV ads based primarily on program and commercial ratings as measured by Nielsen. The demographic segments created from Nielsen’s sample—blunt categories like “females ages 18-49” —are the basis for some $70 billion of TV ad deals annually.
But Nielsen has lately begun to offer additional ways that advertisers can determine where they will get the most bang for their buck. In 2010, it formed a joint venture with digital media company Catalina called Nielsen Catalina Solutions. By merging shopper loyalty-card data with its own TV viewership sample, Nielsen says it can give clients a better picture of what kind of viewer is buying certain consumer packaged goods, an improvement on the typical age-and-gender-only demographic.

For example: Using Nielsen Catalina’s service, Publicis Groupe SA -owned ad-buying firm Starcom—which buys TV slots for Kellogg Co. brands—noticed that Rice Krispies wasn’t that successful with ABC’s “Grey’s Anatomy” viewers, according to Starcom executive vice president Rob Davis. So the ad buyer subbed out Rice Krispies for Special K, a brand they felt matched better with the show’s audience.Shopper data further revealed that “Scandal”—an ABC show popular with women—was actually a good place to advertise Frosted Flakes, a brand historically marketed more on male-focused programming. Mr. Davis said that the company adjusted Kellogg’s advertising allocation accordingly.The TV industry is far behind online services when it comes to ad-targeting. In the digital realm, marketers routinely place ads not just based on consumers’ age and sex, but also their geographical location, shopping habits and other bits of information logged as consumers traverse the Internet. That is one reason that spending on digital ads is expected to reach about $82 billion by 2018, eclipsing TV spending, according to eMarketer.“A lot of the business is oriented around [targeting] today,” Yin Woon Rani, vice president of integrated marketing at Campbell Soup Co. “We just haven’t been able to do it in TV, which is the bulk of our spending, ironically enough.”TV advocates say their medium still provides greater “reach” than campaigns on the Web can, even if the latter provides more granular data. Companies like Simulmedia emerged in the past few years once cable and satellite companies began licensing out their set-top box data.“Really what we care about more than their age and gender is: Do they buy it or not?” said Mr. Davis.There are some limitations to the TV targeting services. While there are good databases on consumer packaged-goods purchases, there isn’t as much information on other categories like movie tickets or pharmaceutical products, industry experts say.Plus, the use of highly-targeted services is still in the testing phase. Advertisers aren’t using the tools to change how much money they spend, but rather to help decide which shows certain ads should run on.“In the inventory we own, there might be shows that do well for Cheez-It and not Special K and vice versa,” said Chris Osner-Hackett, senior director of North America media at Kellogg.Targeting technologies can help TV networks demonstrate their value and stave off digital competitors, media executives say.If networks can assign to individuals “a value based on their true potential revenues you draw from them,” advertisers would have greater return on investment, Mr. Poltrack said.