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Ad Targeting on TV Doesn't Have to Mean Spam Too

Dave Morgan
Dave Morgan  |  Executive Chairman
Published: Nov. 07, 2013

Originally posted on MediaPost

Yesterday MediaPost published a story about media ecologist Jack Myers' prediction that Web-like, audience-based advertising could represent the majority of the TV ad market by 2020, as the TV and digital video ad ecosystems converge.

The piece inspired some comments from Mike Einstein, Joe Mandese and me about whether this kind of targeting would really be a good thing. Mike suggested that precision targeting might unfortunately bring to TV the same kind of ad spam that we all experience so much on the Web. As we all know, in the online display ad world, precision data and targeting enables direct marketers to carefully measure their ad placements to optimize response and conversion rates and ROI, with little regard for what the non-responders think.

In online, if only one of a 1,000 impressions yields a response and sale, the revenue of the sale easily justifies the costs of the 999 impressions that didn't, since online media impressions are so cheap. Of course, while marketers might not care much about the "non-yielding" ads, that don't impact them economically, the folks receiving those irrelevant impressions certainly do and their response is not favorable.

Might this happen on TV? Might Web-like ad targeting on TV bring Web-like ad spam? I don't think so. Heres why:

Dynamic, direct-response-like ad targeting at full scale on TV is still some time away. Super granularity -- addressability and dynamic ads -- at massive scale on TV in the U.S. is also still many years away. Companies like Dish, DirecTV and Cablevision are doing great things with addressable ads today, but it will be literally years until marketers can do similar things in the majority of U.S. TV households. There's just too much legacy infrastructure that will need to change.

Subscribers won't stand for it. Ads on television are balanced with very expensive content. U.S. TV networks spent more than $35 billion on new programming last year. Unlike the Web, TV shows are not sidecar content. Bad ads drive tune-away, which hurts ratings. Too many bad ads will drive calls to cable companies and cord-cutting, and assure the continued growth of time-shifting. No one in TV wants that.

More money if managed well. Direct-response ads dominate the Web. True branding ads never got a chance to really take hold. Not so on TV. Brand ads rule the roost there, and DR only fills in the cracks. While DR ads on TV can sometimes pay well, brand ads drive the vast, vast majority of TV ad revenue. TV media owners will find that content buying plus audience buying will yield a bigger win. Very likely, bad direct-response ads will get squeezed out of TV, not brought in.

Inventory is too valuable. The primary reason why there are too many spam-like ads online is because it costs next to nothing to buy them. Not so in TV. While you might be able to pick up a bargain in fringe time on a local cable network, spammers simply cannot afford to buy mainstream TV inventory.

What do you think? Will Web-like ad targeting on TV bring with it Web-like ad spam?