Tuning In to Consumers with Targeted TV Ads
Jeff Sporn, IXI Services, a division of Equifax
Online advertising's transition into a data-driven market should come as no surprise, because it's so easy to apply math, science, and measurability to online media. It's been more difficult to apply new data practices to traditional media formats like TV, where entrenched buying practices have been slow to take advantage of the opportunities data presents.
There's no reason television can't use the viewing habits of a household to serve up the appropriate advertisements. Using data to identify precise customer segments watching national TV could change the way TV advertising works, but that's still a ways away. Right now, the data revolution is happening on the local level by taking advantage of local airtime.
By delivering different ads in different regions and working on a local level at national scale, TV targeting is capitalizing on something digital has been promising for years. The benefit of buying local time on cable companies, rather than on networks or cable channels themselves, is that different audiences in different regions can see different ads. Everyone is used to seeing ads for a local car dealership, restaurant, or other business on national broadcasts. But through this tactic, companies can mimic the dynamic creative of online display. Direct marketers can push different offers depending on regions based on what the data tells them. A bank could offer free checking accounts for new accounts on the East Coast, and cash back offers in the mountain region, depending on which offer performs best. Someone watching The Walking Dead in Denver could see a totally different ad than the one I see in Virginia from the same brand.
It's still difficult to buy local time from multiple telecom and cable companies, with too many insertion orders and salespeople to juggle. There are companies that have built solutions that let advertisers buy through a single point.
TV is no different from other media in that different data sources will work in different ways, depending on the advertiser's needs. Auto manufacturers have different messages and different models to offer, and they would use as much data as possible, including online behavioral data, television viewing, financial profile, demographics, and even auto history, to form the perfect marketing message, if allowed. Financial data can identify heavy spenders or investors, which is beneficial to nearly every advertiser.
But TV lacks the behavioral information available online in the form of cookies and abandoned shopping carts. With strict separation from PII, TV targeting right now relies heavily on third-party offline data, demographic averaging, and viewership data. Advertisers will need the third-party data broken into sets that are differentiable on a regional or neighborhood level, likely on a ZIP code-targeted level, and combined with set-top box data to find the regions where their audience aligns with certain programs.
Things will not stay this way forever, and there are a few big jumps that are pretty easy to expect. The first is moving the stage from local to national in terms of targeting, so that marketers are buying campaigns to hit precise audiences, instead of buying TV show time. For this to happen, networks need to change how they sell advertising time. Still, it's just a matter of time before advertisers use their power to stop paying for 60-second blocks for all viewers and instead get selective by only paying for viewers who fit their services.
For even more integration, we'll likely see context and content enter the equation. It is entirely possible that after the death of a beloved character on ABC's Revenge the audience sees a tasteful advertisement for flowers, but one where the arrangements are segmented so that some of the audience sees the $200 arrangement while others are pitched a discount $30 bouquet. One break later, after the inevitable elaborate cocktail party on a yacht, the ad shown is for luxury cruises lines for part of the audience, and trips to a water park for others, based on income and travel propensity.
TV could possibly be an even easier place to understand the insights that come from data than the Internet, because there isn't a glut available like there is online. By working with data sources that allow precise targeting, the targeted TV space will grow tremendously in the next few years, possibly even implementing the programmatic practices available online today. For now, the TV ad targeting revolution is happening on the local level, but we'll soon see it expand to the point where brands can reach their audience via display, email, TV, and even direct mail in a carefully staged campaign.
Jeff Sporn is SVP & GM, Digital Solutions, for IXI Services, a division of Equifax.