Last weekend, long-cancelled FOX program Arrested Development came back from the dead via Netflix. The program, which drew low ratings while on TV, is rumored to have accounted for 36% of all Netflix streaming the day it launched.
This successful reanimation illustrates a puzzle in the relationship between TV media and its profit center – advertising. Many programs are too niche to sustain a large enough audience to stay in play on TV networks. But the more niche an audience, the more effectively an advertiser can target their shared interests (at least in theory). Networks want huge audiences; advertisers want effective targeting.
Thankfully, advances in TV technology and multi-screen viewing, when done right, will close this interest gap.
Smart TVs and Xbox Kinect create audiences of one
All of our media devices – TVs, PCs, tablets, phone – are converging into the same device on different sized screens. And once they’re all wirelessly sharing information, our connected TVs will know the things we buy, the wishlists we make, the reviews we write, and the things we watch.
Using this personal data, our TVs will tailor the ads we see to our interests and needs. Instead of showing the same ads to everyone watching Saturday Night Live, the TV will fill commercial breaks with ads chosen for their relevance to each individual viewer – potentially, a different ad on every set. It may even ask viewers to rate ads as relevant or irrelevant if they choose, as Hulu already does.
And using facial recognition through devices like Kinect, the TV will know specifically which member of a household is watching, and have different settings for each. A senior will see commercials based on his reviews and interests, and his teenage granddaughter will see different ads based on hers.
Using facial recognition in this way, the same advertiser could target different creative to viewers in the same household. Say an eight-year old girl sees an ad for Disney World. Kinect knows who she is, so the TV serves an ad full of images of girls her age hugging Cinderella and riding the classic Dumbo ride. Later that day, her teenage brother sees a different ad for Disney World, full of teens riding the scarier and more adult rides. And that night, Mom and Dad see an ad full of families laughing together around the park, with emphasis on affordable park entry and hotel packages. Same advertiser, different ads, each targeted to the specific viewer.
Second-screen layers serve niche interests for the same program
Different viewers have different interests while watching the same program, but the mass-media nature of TV has meant broadcasters can’t serve each individual need. Second-screen experiences – which use a mobile app to surface additional content related to the program the user is watching – change that. While the mass-media program plays on the TV screen, the second screen provides an accompanying niche experience.
Perhaps the viewer wants entertainment news about the actors on the show, or in-game stats about the players on the court. Maybe they want guiding plot points to help them follow a complicated story, similar to ABC’s “enhanced” episodes of Lost. Say they want to participate in chats and polls with other fans, like in Showtime’s sync app for Homeland. Or to read reviews on and even order the clothes characters are wearing, like in Gossip Girl’s partnership with Shazam. Whatever the viewer’s unique interests, different synced mobile apps could serve.
What does this mean for advertisers? Via these TV companion apps a brand could target not just all people watching the Oscars, but women watching the Oscars with the accompanying dress identifier app. Not just everyone watching Monday Night Football, but men age 30-45 watching while using their synced fantasy football app. The smaller audience, partnered with identifying behaviors and demographics indicated or collected by the app, equals more effective targeting.
TV advertising used to be (and still almost entirely is) based on impressions. More eyeballs, more money. But advances in tech will increasingly shift the spending focus from quantity to quality. Mass targeting based on niche interests means better ROI for advertisers, and more revenue for broadcasters.