Opt-in Internet Advertising via TVs’ Set-top Boxes
Posted: October 09, 2009
By Ron Callari
Opt-in versus opt-out advertising on the Internet has been a point of contention between consumers, advertisers, search engines and cable TV companies. What is being put in place today could affect how we all look Internet and TV advertising in the future.
Since the underlying economics of the Internet relies heavily on advertising to keep so much of the online content free, Google and other search engines have turned to behavioral targeting to track the websites we visit, the online links we click, the search queries we conduct, the products we put in virtual shopping carts and the personal profile background info we reveal about ourselves on social networks. They then take all of our online habits and mine that data to serve up targeted advertising pitches.
The conundrum that has surfaced as a result is finding the right balance between protecting the fundamental privacy rights of consumers and preserving business equilibrium.
Rep. Rick Boucher (D-VA) is attempting to draft a bill in Congress that will seek middle ground in the long-running debate over what the default assumptions should be when companies monitor consumer’s online interests.
On the one hand, privacy watchdogs say websites should be required to obtain user permission where they would need to “opt in” before their data is collected. On the other, the website and advertisers feel that people would become inundated with permission requests and the better practice would be to have those that do not want to be tracked to “opt out” of data collection.
Nielsen Ratings have been the golden standard for TV rankings since the very first TV ad was sold. However the core of that data is based on a very small sampling of households. Now, with the enhancements of the digital set-top box technology, future data collection can become an integral part of the TV ratings currency. According to a recent Media Week analysis, “Cracking the Set-Top Box Code,” data mining from STB devices can deliver viewing data from millions of households dwarfing Nielsen’s current 18,000 national meter panel.
So now the industry has the potential to tap larger panels pre-built into the set-top boxes that come part and parcel with the cable TV hook-ups in our homes and are subsidized by viewer subscription dollars. “The biggest barrier to entry in TV measurement is gone except for getting access to the set-top box data,” says David Poltrack, chief research officer for CBS.
“There is a chance for an entrepreneur to make a mark and establish a place in the marketplace for the first time,” by cracking the code of STBs. The formation of Canoe Ventures, a consortium of the six largest cable companies, may be that innovator. It may help lead the way providing research firms with a single point of contact for partnerships and business deals. And while addressable applications seem to be the top priority, their targeted goal has been to bring STB data to market.
Canoe Ventures’ approach for taking set-top box technology to its next level of engagement was initially based on a product they called the Community Addressable Messaging (CAM) program. In simplest terms, addressable advertising is all about getting the right message out to the right viewer at the right time. It is a form of advertising where specific commercials are delivered to a specific demographic via cable. By manipulating the code in the set-top box cable, the consumer basically send requests from their TV sets to the Internet. In so doing, TV companies can keep billions in ad dollars from flowing to Google and the other Internet search engines.
Addressable advertising has been something cable companies have been promising advertisers for years. A major challenge to delivering on the promise is scale. Marketers need to reach large groups with a single campaign, but it is difficult to buy addressable TV advertising on a meaningful scale when different cable companies offer competing technologies. Canoe Ventures’ CAM program was basically halted because of this difficulty.
According to Dana Runnells, senior director, marketing communication for Canoe Ventures, “after identifying limitations, a mutual decision was reached by Canoe and our trial partners to redirect resources towards the development of a future, more commercially viable iteration of the addressable advertising solution.”
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