Why 'Advanced' TV Ads Haven't Spawned a Marketing Utopia
That I live in a city (New York) where 54% of residents are car-free means chances are good that I don't own a vehicle. The odds increase with my address in Manhattan, a borough where by some counts about 75% go without wheels, and positively soar in my parking spot-desolate ZIP code.
So it's a safe bet that all the auto ads dominating commercial pods I see nightly aren't safe bets at all. Despite being nowhere near a sales funnel that might eventually deposit me behind the wheel, I am besieged by car and car-related pitches. I see Lincoln pitchman John Slattery more often than I see my friends, and the Jay -Z flourish announcing that Chrysler 300 spot loops endlessly in my mind. Don't even get me started on Progressive 's Flo and the Geico Gecko.
By any ROI calculation, it's a waste -- one you'd think would be avoidable in our age of big data, hyper-targeting and ultra-accountable marketing. By all rights I should be lumped into a consumer segment with a clever name -- Autonots? -- that , combined with data from my set-top box, could keep those cars ads out of my grill.
But both the will and the execution have been weak when it comes to TV targeting.
TV as a medium remains startlingly mass and, as a business, no less successful for its reluctance to dive into narrowcasting. A $60 billion market, TV remains the largest single area of ad spending, more than twice as big as the faster-growing online-ad business. TV is the last bastion of cheap, broad reach in an age of media fragmentation and audience splintering.
Most attempts to modernize that appeal have failed or been severely delayed. Addressable advertising that allows targeting based on customer segments or purchasing history is still at beta level. Though DirecTV and Cablevision have executed significant targeted-TV ad programs, an attempt to create a national targeting sales platform collapsed this year when Canoe Ventures laid off most of its staff and announced that it would focus on slipping ads into video-on-demand.
For Chris Faw, senior VP at Time Warner Cable, one of Canoe's backers, this is a case of focusing on what programmers wanted, a way to make sure they're monetizing the very expensive content people are watching on-demand and taking advantage of that presumably engaged viewer who's taken the time to seek out the show he or she wants. He said addressability was never that much of an issue for Canoe. As for Time Warner , it's long been able to target by location, offering more than 50 zones in the Los Angeles area. But household-targeting is further off.
"We'll activate the technology to do that and we'll see if there's somebody willing to pay for it," he said. "We have to get there at a speed the market can afford. If we came out now and said all 14 million of our set-top boxes are addressable, what would they say on Madison Avenue? "How do I write that campaign?' "How do I rate that ?' "How do you charge me for it?'"
In contrast to social media's big bang, the growth of what's termed "advanced advertising" in TV has been glacial and nonlinear. One of the most interesting documents charting this checkered history comes from Deloitte in its "The Future of TV Advertising" report. These kinds of future-peerings are usually breathless; Deloitte's is practically asthmatic.
In laying out the challenges for advanced TV advertising -- which include technology, measurement, buy-in-from advertisers and agencies -- Deloitte reports that the current market could occupy less than 1% of all ad budgets and remains largely experimental. Perhaps most interestingly, Deloitte reports that not everyone in the TV business is clamoring for targeting. "The existing system is not broken," reads the report. "Targeting by program and slot, complemented by traditional awareness and response metrics, and by online buzz tracking, all create quite a high bar for any new targeting to overcome."
In other words, there's a persistent sense that the idea that an audience for "The Iron Chef" is probably going to be receptive to, say, Kraft commercials, might just be enough to ensure some relevance. The obvious counter argument from the targeting crowd is that addressable ads can go much deeper than that , pulling in third-party data to deliver hyper-relevant ads based on actual purchase history -- ensuring that the cat owner gets the cat-food ad.
Before packing the bags for this marketing utopia, consider this: If you think the privacy outcry has been loud when it comes to tracking what websites you're on, wait until privacy advocates realize where some of the data fueling advanced TV targeting is coming from.
One of these data providers is Experian, best known as a provider of credit scores that also, according to its own rather optimistic report on the future of TV advertising, "provide[s] media-neutral targeting of advertising at a household or other aggregate level." No doubt all involved will take great pains to ensure no personally-identifiable information is misused, but there's still something slightly icky about this scenario: The company that gave you the low credit score that screwed your mortgage application because you have too much on your Visa is giving marketers data to find the most direct way to your wallet.
So when Deloitte says targeting is five years off from making a real impact, that forecast doesn't feel overly conservative. According to its interviews with industry, advanced advertising "is likely, in the short to medium term, to focus on direct response while linear TV continues to deliver the majority of brand campaigns."
Maybe that 'll make local sales pitches more relevant, but it won't do much to change my prime-time commercial pod. But maybe that 's not such a bad thing. Sure, it has its waste and it's too predictable and repetitive. But at least it's decidedly un-creepy.