Reinvent TV

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April 16, 2005

Targeted Advertising

Someday, ads will find their way into (or around) video on demand (VOD) or internet protocol television (IPTV) or digital video recorders (DVR). These non-linear television vehicles are also equipped to provide targeted advertising. One question is this: will advertisers use the context of the video to guess at who is watching or will it be necessary to use a demographic profile of the viewer to determine which ad is relevant?

An article entitled ‘Media Buyers Detect Network Branding Effect, Say It's Influencing Demos’ points out that a network can influence which demographic tunes into a program. Its case in point is the show Everybody Loves Raymond. Apparently, there is a 10-year age gap between those who watch the show on CBS versus those that watch the exact same show when it appears on TBS. It is speculated that how each network markets itself has a lot to do with which demographic tunes in.

I think that this is another piece of evidence to indicate the value of using a demographic profile to determine ad relevance rather than relying on Nielsen ratings or some equivalent.

This is an idea that transcends VOD, IPTV, or the DVR. In fact, even for digital cable today it would not surprise me if Comcast and Time Warner Cable started selling commercials to the set top box instead of to the show. In that way, no matter what each viewer’s tastes are or what mood they are in that night, the targeted message would still be shown.

This type of demographic targeting has one other huge advantage that media buyers should covet: the second part of ‘reach and frequency.’ If the buyer wants a specific frequency number (which they do), then it will be easy to tell an ad to air a maximum of 5 times at each set top box (for example). Obviously, the media provider’s interest in do this is that the ad campaign should command a higher premium.

In future articles I will explore the strategies and legality of combining television advertising with demographic profiling. However, for purposes of this posting, I think that when VOD advertising begins to take shape, demographic databases will be a part of that solution.

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