New Technology Allows For TV Ads to Target Specific Individuals, Families

New Technology Allows For TV Ads to Target Specific Individuals, Families
February 17, 2014 9:07 AM

WASHINGTON — The days when political campaigns would try to make inroads with demographic groups such as soccer moms or white working-class voters are gone. Now, the operatives are targeting specific individuals.

And, in some places, they can reach those individuals directly through their televisions.

Welcome to Addressable TV, an emerging technology that allows advertisers — Senate hopefuls and insurance companies alike — to pay some broadcasters to pinpoint specific homes.

Advertisers have long bought ads knowing that only a fraction of the audience was likely to respond to them. Allowing campaigns — political or not — to finely hone their TV pitches to individuals could let them more efficiently spend their advertising dollars.

“With a traditional TV buy you can end up paying for a lot of eyeballs you don’t care about,” said Chauncey McLean, chief operating officer of the Analytics Media Group, an ad and data firm.
“Addressable TV is a powerful tool for those that are equipped to use it. If you know who you want to talk to and what you want to say, you can be much more precise.”

Data geeks look at everything from voting histories to demographics, magazine subscriptions to credit scores, all in the hopes of identifying their target audience. The advertiser then hands over a list of targets and, without the viewer necessarily realizing it, the ads pop on when viewers sit down to watch a program if their broadcaster has the technology.

“This is the power of a 30-second television commercial with the precision of a piece of direct mail targeted to the individual household level,” said Paul Guyardo, chief revenue officer at DirecTV. “Never before have advertisers had that level of precision when it came to a 30-second commercial.”

The level of precision on televisions has long been a dream for political campaigns, which are decided by relatively small groups of voters. President Barack Obama’s campaign in 2012 experimented with it on a small scale, but too few homes were in broadcasting systems equipped to handle house-by-house decisions.

But earlier this year, DirecTV and Dish Network announced a partnership that would allow political clients to reach into about 20 million households by matching up customers’ identities with their satellite receiver, much like a telephone number rings at a specific handset.

At the same time, NBC and parent company Comcast are opening the door for advertisers to target specific households using video-on-demand services in 20 million more households. The communications giant is not yet ready to implement the targeting during live broadcasts, though.
And GroupM, which handles about one-third of the world’s ad buys, recently formed a division to handle such addressable advertising.

“We can send different commercials to different households based on what we know about these people. Instead of one message per state, it could be 12 messages per state,” said Michael Bologna, GroupM’s director of emerging communications and president of the newly formed Modi Media.

The broadcast companies are expected to be able to charge more per viewer than for other ad orders, but in exchange advertisers get a greater confidence that their message is finding its target. For instance, Allstate has used such an approach to weed out homeowners when it is pitching rental insurance on some broadcast systems.

Such specific political outreach has been possible for years as strategists buy, build and scour detailed data on each home to determine whether it is worth the time to knock on a door, to register a voter or to phone them to remind them to cast a ballot.

In recent years, Democrats have built an advantage on that data front.

The Republican National Committee has made catching up a priority, saying it would focus on data this year and leave advertising to outside groups. The RNC has announced one effort, branded Para Bellum Labs, to help the party build its list of likely supporters for races up and down the ballot.

The RNC has a lot of catching up to do. Obama’s two presidential campaigns had a better grasp of the data.

Last year, Democrats built on those abilities in Virginia’s gubernatorial contest. Strategists there used technology that pointed to specific individuals for a knock on the door, a call on the phone or an ad on their social networks.

It wasn’t immediately clear to those Virginia voters that they were getting more attention than their neighbors. But behind the scenes, Democratic candidate Terry McAuliffe’s advisers were going after just a few thousand voters. For instance, his strategists pinpointed 494,000 voters and flooded them with Facebook messages criticizing McAuliffe’s rival, Ken Cuccinelli.

“It’s a shift from identifying groups to identifying people,” said Andrew Bleeker, president and CEO of Bully Pulpit Interactive, the main firm advising McAuliffe on digital strategy.

But there are limits. Fewer than half of all households have a cable box or satellite receiver that allows the broadcasters to splice in ads on some televisions and not others.

The providers are limited to selling about two minutes of addressable advertising per hour. An  hour long show on a broadcast network has about 14 minutes of commercials. Cable varies, but they generally have about 17 minutes of commercials in a 60-minute slot.

Building the list of targeted voters is tough and sometimes costly.

And there’s no way of telling that the targeted viewer is the one who sees the ad. All that can be known is that it made its way into the households; federal laws prohibit the provider from telling the campaigns any details about specific viewers or their individual habits.

Yet this option, reaching maturity in time for November’s elections, could help campaigns and candidates more efficiently spend the hundreds of millions of dollars that are already being raised.


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