I spent last week attending the CTAM cable advertising summit in Denver. The people at this conference are working their big brains to the bone figuring out ways to increase advertising revenue for MSOs and cable programmers. In my next three articles, I will be sharing some of my takeaways from the conference and the developing trends that I see motivating the cable TV ad business.
Dynamic Ad Targeting is the future of the cable business
Just as Google delivers custom ads designed to the user’s personal tastes and desires, the cable industry is building a new generation of hardware and software solutions to deliver the perfect ad to the perfect prospect at the perfect time. The ultimate goal is elimination of ad waste. For example, smart cable boxes will know that a viewer only buys pick-up trucks and will eliminate sedan ads from their TV viewing.
The New Technology is being Defined Right Now
The MSOs are pouring millions into ad targeting technology in projects such as Canoe, and EBIF. The hardware development is well underway. The technology can be implemented from either the cable head end, or directly from the set-top box. Today, 65-70% of American homes have smart cable boxes capable of at least some sophisticated ad targeting. That number will continue to increase as old boxes are retired.
The Long-Term Vision for Smart Cable Boxes
The boxes will be able to monitor every nuance of TV viewing. They could integrate demographic information using zip code, public records, even things like credit scores. They will watch how long a viewer lingers on specific program guide listings, or the specific segments he watches on Sportscenter. By watching each person’s individual programming choices, it will silently identify every member of the family and understand everything about each person’s tastes and buying preferences. It will gather data every minute, making constant conclusions based on what the person seeks or avoids.
For example, the box could notice that the TV is usually off during the day. Then suddenly, the TV is in use for long periods during the day. The box also notices that the DVR no longer skips ads for local trade schools, job fairs and loan companies. An analysis concludes that someone in that household probably lost a job. Because most of the daytime programming consists of Sportscenter, Spike, and Clint Eastwood movies, the box could figure out it is probably dad. So the ad mix during the day will now be customized to a 40 something male who is out of work.
Graeme Newell is a broadcast and web marketing specialist who serves as the president and founder of 602 communications. You can reach Graeme at firstname.lastname@example.org.