NEW YORK: Cable and satellite TV providers in the US are adopting contrasting approaches to utilising viewer data, and learning fast from broadcasters and online companies such as Google.
DirecTV, the digital television and entertainment provider, collects information from customers' digital video recorders and combines it with market research from other providers, reports Reuters
Paul Guyardo, chief marketing officer at DirecTV, said: "We can target based on demographics, household income, geo-targeting, home owners versus rental – a wide variety."
This, he insisted, made advertising more relevant for each consumer, in a similar fashion to that of online advertising.
And, since January, DirecTV has been allowing 40 of its clients, including German carmaker Volkswagen, to run addressable ads, a move expected to net the US company $60m in revenue by the end of the year, according to someone familiar with the matter.
That figure compares to zero just 12 months ago, and revenues are anticipated to rise by double-digit percentages for the foreseeable future, as DirecTV targets its 12m subscribers.
Starz, the US premium film channel, piloted addressable ads for five days in March using data from DirecTV, and reported a 49% rise in sales among viewers exposed to these spots compared to a control group.
Dish Network, the US satellite provider, has adopted a slightly different method. Warren Schlichting, its senior vice president of media sales, said the company did not want to target ads based on viewing habits, as it might make subscribers uncomfortable.
He added that the issue of viewer privacy meant "the rules need to be worked out as companies and viewers get used to this kind of advertising."
Nevertheless, Dish is embracing the technology, signing six and seven-figure deals with its advertisers, according to Schlichting.
Cable provider Comcast is also investing in addressable advertising, and the growth of this phenomenon is concerning some consumer advocacy groups.
Jeff Chester, of the Center for Digital Democracy, said: "Consumers are getting little in return except an invasion of privacy."
Meanwhile , Jeff Minsky, of media agency OMD, warned there are technical hurdles to overcome, and suggested that despite the attractions of addressable advertising, "sometimes it's more cost-effective to just have a mass-market, national commercial."
Data sourced from Reuters; additional content by Warc staff