When Advertising Becomes Information--that's gold.

Posted by: David Kiley on June 23, 2005

Last night in the 90 minutes I watched a bit of TV, I saw two TV commercials for General Motors’ big discounts in which they are selling vehicles to the public at the employee price. I am not in the market for a car, and won’t be for at least two years or more. I also saw a dog food ad. I don’t own a dog and don’t intend to. I also saw an ad for the Fantastic Four, a movie I won’t go to see this summer even if it was playing across the street and I had a free babysitter. It’s not my cup of tea, though I might consider watching it on one of my pay cable channels when it comes around. So much advertising and so little of it relevant to me. No wonder I use my Comcast DVR and remote to skip ads and bounce back and forth between my show, a ballgame and CNN while the ads are playing. I get especially ticked off when all the channels are running irrelevant ads at once an I can’t avoid any of them.

It was a nightly experience like that, all too common in my TV watching, that got me so interested in a system designed by Invidi Technologies, which will be tested by Time-Warner Cable this year and Comcast next year. I wrote an article in this week’s magazine about it.

Through my digital set-top box, Invidi and Comcast would be able to discern that I am a 42 year old male by my remote clicks, and maybe even more stuff, such as: I’m not a dog owner; I make a decent living; I am interested in knowing more about how best to save for retirement; and who knows, maybe that I need new gutters.

With that info gleaned from my clicks of the remote, anonymously and not tied to my address or cable-box, Comcast would send me: an ad for a Gillete razor, perhaps, not a Revlon make-up ad (I left that life behind years ago); an ad for Orbitz or Marriott(I travel frequently,) but not a cruise line (I will never take a cruise).

Brad Simmons, vice president of media services at packaged-good giant Unilever North America, says he is anxious for that level of targeting, and is only concerned that such targeting techniques can be deployed on an efficient national scale, so he can buy hyper-targeted spots on broadcast and national cable networks, and not be restricted to dealing with just local buys made on the cable systems that will control the technology. “We could achieve tremendous efficiencies being able to reach predominantly male consumers, for example, with male only products.” He's right to be concerned. Broadcasters and cable operators have been at odds for years. And cable executives say they aren't anxious to share this targeting edge with broadcasters.

John Krafcik, vp of strategic planning at Hyundai Motor America said his company is constantly looking at “addressable” ad messaging through direct marketing and the Internet, which means advertising that gives targeted individuals the opportunity to talk back to the advertiser. It also makes it easier for the advertiser to measure the effectiveness of its ad spend. “With a marketing budget smaller than our competitors, we have to look for greater targeting like this all the time,” says Krafcik.

CBS's head of research David Poltrack told me that CBS has research that shows that people are so fed up with irrelevant advertising, a large percentage of those polled said they would pay a higher cable bill to eliminate ads. But a clear majority of those people in the same survey who said they'd pay a higher bill said they would prefer a lower bill, and would take ads if they could choose the categories.

Imagine! I could vote via my remote control every month, in my perfect media/advertising world, to receive ads that month in the categories of home improvement, men's fashion, imported cars, local gutter installers, retirement planning, mutual funds. That's the stuff that's relevant to me.

Such an arrangement and system is a version of "opt-in" marketing. That's advertising we choose to receive. Perhaps a cable operator like Comcast could even incent me with a lower monthly bill, or some free pay-per view movies for the number of categories I choose. If an advertiser like Honda, for example, wanted to advertise and also put a five minute film about its hybrid car on Comcast's video-on-demand menu, perhaps I could accrue points toward free pay-per view movies for watching. Comcast, you see, could charge advertisers like Honda, Ameritrade and Home Depot extra for the number of people clicking through to their longer form ads.

Now we're talking about relevancy to this consumer!

Reader Comments

Frozenframe

June 23, 2005 8:20 PM

Well, for a start marketing companies should take another look at their choices of programs to play their ads.
It is astounding how many ads I see on programs with totally different target audiences.

Mary Schmidt

June 24, 2005 2:39 PM

I'm glad you'd like "targeted ads" just for you - I'd rather skip the whole thing entirely. I get my information from other sources - including most credibly, from friends and colleagues. Anything that looks like an ad doesn't have much credibility. In general, however, I believe we're all so numb to advertising, we seldom really "see" it. So, such innovation will have limited impact. If the "customized ads" do make a difference, it would only last until we get used to it and then it'll become invisible too.

Also - the targeting could be actually reduce sales in some cases. Sure males shave, but so do women...and we also buy most of the stuff for the males (and make most of the buying decisions, including such things as cars and lawnmowers.)

In any event, an interesting time to be a marketer.

Chris Messina

June 25, 2005 9:22 PM

David,

Your points are insightful. There's probably no better place to see where television is heading than online. The ability to deliver targeted ads to consumers with a reason to want to see them is what's driven Google's phenomenal revenue growth. Their Ad Words and Ad Sense programs deliver paid placements based on search requests, digital profiles analogous to the profiles generated by the Invidi box. Opt-in, targeted marketing is not only the future; it has already arrived.

At The Body1 Network, we are betting on the growth of this form of commercial communication. Our sector is healthcare, but the trends also apply to other industries.

Consumers want to receive hyper-targeted marketing messages in equally focused, opt-in, online communities. We call this "contextual engagement". In reading your piece, that seems an appropriate way to describe the direction of broadcast media as well.

I look forward to your next piece.

Chris
Chris Messina
The Body1 Network

Articles

June 29, 2005 4:51 PM

I hope TV advertising doesn't get as bad as online advertising. People are getting so turned off to advertising in general. Advertising to people who have at least some interest in what you're selling will yield the best for the company and the consumer. Well, as far as TV ads go, I love my TIVO.

Volcano Matupepe

September 20, 2005 12:15 AM

that's gold

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News, opinions, inflammatory meanderings and occasional ravings about the world of advertising, marketing and media. By marketing editor Burt Helm, Innovation Editor Helen Walters, and senior correspondent Michael Arndt.

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