Cablevision says that it has begun finally to roll out demographic based advertising technology which has been in gestation for at least the past two and a half years ‘ trying it out in 500,000 homes in Brooklyn, the Bronx and some New Jersey areas in the US.
Back in July 2006 Cablevision laid on a 100,000 home test for the system which matched viewer’s interests to the advertising that a home will receive on its cable TV.
The 500,000 homes is seen as a significant step up, suggesting that the technology is more or less ready ‘ although you wouldn’t know it from Cablevision’s last quarter, where its miniscule advertising revenues were down. But then again it’s probably not going to increase Cablevision’s own advertising revenues.
The aim is to prove the technology is good enough for all of Cablevision’s 3 million customers and it relies on data from credit agencies such as Experian, which provides details such as age, gender, marital status, income, education level, occupation, number of children and shopping habits.
Cable operators have been very slow to adopt this, because really while they have the two way network, they often don’t own the advertising inventory and they have had to build up inventory in VoD services and in content which they have acquired. It is really only since the IPTV world began talking about developing one to one advertising techniques that the cable community has woken up. Cablevision would now be able to offer the advertising systems in partnership with the cable networks which provide its content.
When Cablevision discussed this before it said it was working with a company called Visible World, a company that already has relationships with cable operators Cox and Comcast, Seachange, the cable VoD server people, and Experian itself, as well as Cablevision.
Like all things new in cable, if one company finds any benefit from it, the other companies will follow on pretty quickly and other cable operators are thought to be conducting their own trials in secret.
The dream is that each advert is served only to the audience that will look favorably on the advertised product, and response should be pretty much the same as if the ad went to the entire footprint. In this way cable operators could deliver 5 or 6 ad campaigns at once, and each of them might be successful, instead of just one. The result should raise advertising potential revenues substantially, but as we say cable operator advertising is small compared to the advertising of the content customers that they can work with. So we see this more as a resource offered to its cable networks in return for a split of the increase in revenues or a reduction in content carriage fees, or both, as well as making the best of the limited cable advertising inventory.
Theoretically all data is matched “blindly” by the data provider, but some communities are known to be uncomfortable with the ‘big brother’ implications of such a service. It’s just not nice knowing that other people ‘know’ stuff about you.
The technology requires no hardware installed at the subscriber’s home, and is controlled centrally. One of the limitations of this type of technology is that while it might only advertise Ford accessories to homes which have Ford cars, it might be advertising them to the three year old baby daughter, not the Father, and no system so far identifies a one to one relationship in the way the internet or mobile can. Another approach which perhaps offers even better results is content addressing, where adverts are selected based on what a customer is watching. Comcast and Verizon are said to be working on this. At least this way the actual live viewer (the one controlling the remote) can be identified by their viewing behavior.
Also some low income homes perversely will buy high income goods sometimes, and vice versa, so this is really just the start of a long journey to create more effective, demographic driven advertising.
Cablevision said that it tested the technology using it to sell its own services and it has proof that it is highly effective.
Given that US cable operators have hit a wall in terms of new homes joining cable, this is yet another approach for them to raise revenues.