In spite of television’s slow and gentle decline in popularity, the medium is far from dead. Marketers are still looking for ways to increase their return on investment with commercial advertisements. By incorporating Internet-modeled advertising that targets individuals and families rather than a broad net of viewers, they may have found a way to do just that.
Addressable television offers a precise way to effectively target viewers based on their individual preferences, similar to the way Internet advertising works on websites like Facebook or Google Ads, which would have a much greater chance of success. In light of the upcoming 2016 presidential election, the ability to individually target television viewers with ads tailored to their political preferences could become a major tool for candidates seeking to influence the electorate.
For addressable TV to work, marketers would need to know as much information about individual consumers and households as possible. Increased data collection methods ultimately will lead to more specific advertisements, which could in turn lead to higher ROI for advertisers, and more ad sales for TV providers. Cable and satellite companies would need to collect information like location, income, political affiliation, family composition, hobbies, and interest in order to target ads to individuals.
For example, by knowing that one father had gone to several different car dealerships, TV providers could assume he was interested in purchasing a new car and therefore target automobile advertisements to him. If they know his income and monthly discretionary spending, then the kinds of cars he is shown in ads could be even further tailored. Providers may use location information to detect the fact that his wife takes their children to school and to soccer practice, and could therefore send her targeted ads for soccer equipment or kid’s toys, or political ads about education reform tailored to her activities and interests. Although this may seem invasive at first, it is an excellent way to show people specific things that they are interested in while simultaneously saving companies money on marketing.
The implications for this new Programmatic TV and direct advertising model are astounding. Many people cite concerns about data invasiveness and personal privacy, and although these are valid concerns it would certainly be in the interest of businesses to keep data collection as professional as possible.
In addition, if they work as intended, addressable TV ads could have a drastic impact on national and local politics. Since marketers would be able to send different ads to different demographics; die-hard Democrats could get one kind of ad while moderate conservatives could receive a completely different ad, and swing voters could get something else entirely different as well. This could affect presidential candidates like Bernie Sanders, for example, who doesn’t have the deep coffers of other more well-funded campaigns he would need to bombard voters with blanket advertising, and who could greatly benefit from direct advertising to specific demographics interested in hearing his message. In fact, TV providers like DirecTV and Dish Network have already started to work with both Democrats and Republicans to send ads based on voter records, and this will only continue to grow as the 2016 election nears.
The success of direct marketing and addressable television will definitely bolster Big Data firms, which are already becoming more omnipresent. This could certainly have very serious implications for many, but with regard to marketing this will potentially improve people’s lives. Information could be tailored to specific interests, and products could be advertised based on perceived needs. Companies could see the kinds of things a certain consumer is interested in, and alert them to new things that they might have missed otherwise. Advertisers could reach more of their target audience at a lower price too, so the overall benefits could greatly outweigh any potential negatives.
Whatever the outcomes for consumers and advertisers, the effects of addressable TV ads will be felt loudly and publicly, and very soon.