Stand by for viewer-specific TV commercials

Imagine a man and a woman in different units of the same condominium watching the same live football broadcast on the same TV channel. At half time they’re going to see the same commercials – it’s always been that way with the TV industry. But that’s about to change now that technology has simplified what was heretofore an extremely laborious and complicated process. We have arrived at the dawn of “addressable TV”. Introduced a few years ago, the concept has gradually gained interest and support and is expected to soon become commonplace. It means the man in that condo will be watching ads for pickup trucks at half time, while the woman will be seeing ads for cosmetics – or vice versa according to their personal tastes. 

It will be a dream come true for advertisers, their products displayed for precisely the most interested potential buyers. Just as Yahoo and Facebook now gear ads to user preferences, as gauged by monitoring their habits algorithmically, TV broadcasters will be able to shape the message to fit the customer, using different methods to assess their desires. 

There is even optimism that having our ad breaks personalised in this way will make watching TV more pleasant. This form of targeting can be enabled along geographic, demographic or behavioural bases and delivered via cable, satellite, Internet Protocol Television or set-top boxes. Some industry experts call it a “win-win-win” situation, since TV channels can sell more advert time and probably at higher prices, marketers can reach targeted buyers more accurately, regardless of what shows they watch, and viewers will enjoy more “relevant” commercials. 

Magazines or newspapers have long striven to gear their ads to their readers, of course, but it’s been a different story with free TV, where advertisers have had to rely mainly on ratings or guesswork. Advances in technology now enable that sector to identify the households most likely to respond positively to specific commercials. In effect, when advertisers hand over fees for airtime, they’ll be buying the audience rather than the programme.

The merits of the targeting technique seem obvious for the small screen, where it’s technically easier to let viewers choose their own kinds of ads. It remains to be seen, however, whether the same revolution might be viable on the big screen. 

Meanwhile the TV channels and the marketers are already clashing over the prices charged for airtime, with the latter arguing that the resulting limited audience should cost less and the former pointing out that precision targeting is more effective and thus more valuable.

Chief among concerns in the untested market, though, is that the first broadcaster who invests a fortune in the technology of addressable TV stands to lose the most. Rather than the early bird getting the worm, the risk is that the pioneer will become the first mouse to die trying to get the cheese. The technology is terrific but, thanks to the unknown factors, such as human whim, the initial flights might be perilous. 

Regardless, the advantages seem sure to outweigh the disadvantages. In Thailand, the advent of digital TV affords more opportunities for both the television and advertising industries along with more viewing options for subscribers. The problem here is having so many players battling for the same, limited source of income, so whoever comes up with the best advertising methodology is apt to win the war. As long as TV viewers are among the winners, we look forward to the outcome.