13 April 2005

TV's Micro-Targeting Future

In Sunday’s cover story in the New York Times Magazine (NY Times, reg required), Jon Gertner toured the future-technologies labs at Nielsen, Arbitron and start-ups like ErinMedia to glimpse into TV’s next generation: portable people meters will provide 360-degree diaries of our media consumption habits (for those who volunteer to participate) or cable operators will use "upstream" data to track our minute-by-minute viewing habits (for all of us, whether or not we volunteer).

The thrilling (and presumably lucrative) aspect of this future isn’t better insight into who is really watching what, though; it’s the prospect of targeting TV ads only to buyers who have their credit cards out. TV’s version of micro-targeting. As I’ve discussed before, there are costs to micro-targeting. I bet we can solve for the rising media planning and buying workload (perhaps through automation or offshoring). Perhaps we can also figure out how to keep creative costs in check even as we tailor unique ad units for each micro-demographic.

But what really worries me is this: In our eagerness to target only buyers at the end of the consideration funnel (fulfilling existing demand) we risk forgoing the art of demand creation. Here’s the letter I sent to the Times.


To the Editors:

Jon Gertner's article "Our Ratings, Ourselves" (April 10) ignores two seismic shifts that will accompany (and perhaps slow down) the imminent revolution in television ratings systems—two challenges already facing those of us in the business of advertising on the Internet, a medium that reaches as many consumers as television but captures only one-sixth the ad revenue. Sure, the concept of targeting Volkswagen Passat ads to tiny clusters of TV viewers, 300 households at a time, holds a certain appeal to marketers and consumers alike. Seemingly everyone wins when a commercial featuring all-wheel drive airs on TV sets in Rockland County, N.Y., but not on TV sets in Westchester, N.Y., if the snowstorm turns to rain while crossing the Hudson. But here's the rub: This kind of ad targeting means dozens if not hundreds of 30-second commercials for every single advertising campaign, each spot racking up hundreds of thousands of dollars in video production costs. In other words, creative costs could quickly outpace the media costs to place those spots on the air. Likewise, the investment in ad agency staff required to plan, place and track dollars spent across hundreds of channels, websites and radio networks—rather than just a handful in a typical ad campaign today—could put agencies out of business overnight.

To me, as a vice president of sales and marketing for an ad-supported online publisher, San Francisco-based CNET Networks, Gertner’s TV advertising of the future looks a lot like Internet advertising today. As the $60-billion-a-year TV advertising business adapts to our current multi-tasking, fragmented-attention-span lifestyle, it needs to find a way for the Procter & Gambles of the world to customize ad messages to micro-audiences without chewing up their entire budgets creating the commercials; and, at the same time, an automated or offshore solution to manage media planning and buying to salvage a profit margin for ad agencies.

These costly hurdles may remind marketers and media buyers that messaging only to those consumers who are ready to buy today neglects all the other consumers (most of them) who still need a little coaxing from a well-crafted ad campaign.

Chas Edwards
San Francisco, CA


  • The NY Times Mag ran part of my letter in the 4/24 edition:

    By Blogger Chas Edwards, at 4:23 PM  

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