The Trouble with Targeting on Connected TV

Learning How to Target Advertising Without Cookies

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Video is readily accessible to consumers, available whenever they want it from a smartphone, tablet, or computer. And now the streaming world of online video is available on the traditional TV set, with manufacturers expected to push out more models of connected TV this year.

Connected TV promises a blissful union of the TV advertising experience and online audience targeting. Yet it's not that easy to plug the online targeting model into interactive TV, because of the noticeable absence of one key factor: data.

Online audience targeting is possible online because users go from site to site, bouncing between retail and news and video and entertainment, creating advertising opportunities in the process. It's safe to say consumers aren't going to use their TV set as their primary web-browsing device, leaving no historic web behavior data or cookies to fall back on. Advertisers need to get creative to find and target their audience.

One possible solution is to require consumers to log in with a universal identifier – a Google or Facebook account that will use third-party data to associate TV viewing with other web browsing data. Samsung and Lenovo showed off TVs at CES in Las Vegas that automatically log viewers into Facebook via facial recognition.

Google is already connecting the dots across its web properties to merge data and better understand user behavior. When consumers log in to their connected TV via Google, the company can theoretically connect that user's search data to their TV viewing, providing a much clearer indication of how to target that user. Start factoring in other data sets from properties like Google+, and you have a very good idea of that consumer's interests. The same applies to Facebook, where users are already subject to targeted ads based on their interests, interactions and connections.

There are other potential places this model can go. Google's Wallet product, for example, is tied to both a Google ID and a user's credit card information. Now we're talking about the point where one company can follow the thread from online search to a single TV ad to a purchase on a credit card. That's a level of attribution that analog TV can't come anywhere near.

Users would very likely have to opt-in for this kind of targeting, because Google Wallet is subject to financial services regulation and is excluded from Google's privacy policy update, as Ad Age reports. Couple that with the fact that studies estimate less than half of internet-capable TV sets are currently connected, and it's clear we have a long way to go before we reach this golden age of attribution.

Make no mistake; targeting will be the preeminent strategy for connected TV. The interactive video units currently employed online won't translate to connected TV, where viewers are accustomed to a more passive, lean-back viewing experience.

The concept of a login that ties TV activity back to web activity will be the key driver for connected TV advertising. Google clearly has the most data for this type of model, and they're already making a big push with Google TV, so expect them to lead the charge.

Precise targeting is maybe the only way connected TV advertising can succeed, and for that advertisers need to move from cookie-based targeting to targeting based on an I.D. Still, this should be a small hurdle for advertisers to clear when you consider the potential to combine TV viewing with interest data -- and possibly even sales attribution in the very near future.

Mark Trefgarne is the CEO of LiveRail. Follow him on Twitter at @trefgame.
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