Personalised advertising already stalks us across the web, and it’s coming to our TVs, with Channel 4 the latest broadcaster signing up to use Sky’s AdSmart to target commercials. While such a system isn’t quite as invasively personalised as the behavioural advertising clogging up the internet in order to show us shoes we’ve already bought, it could have a big impact on television – and risks being rather creepy.
AdSmart is Sky’s system for targeted, addressable ads, which are commercials that can be swapped out and personalised based on location or other personal data – even in live-broadcast, linear TV. Sky has used the platform on its own channels since 2014, and has this year signed up Virgin Media and Channel 4 to do the same.
For viewers, the benefit is not being shown irrelevant ads – Sky won’t show you ads for its broadband if you’re already a customer, for example – and Sky points to research that suggests there’s a 48 per cent drop in channel switching when such targeted ads are shown. For businesses, small companies can target a specific, hyperlocal catchment area rather than throw away money on nationally shown commercials, opening up TV advertising to smaller companies.
And for broadcasters, the benefit is they can charge more, perhaps as much as ten times more, for what they say are more effective ads – helping to claw in more cash as advertising revenues stall. “Better targeting can be beneficial for both advertisers and viewers: it can not only increase ad return on investment for advertisers, but also deliver more relevant information to viewers,” says Yiting Deng, assistant professor of marketing at UCL. Richard Broughton, researcher director at Ampere Analysis, suggests by a rough estimate it could bump revenue at Sky by as much as 10 per cent and across the wider industry by 2 per cent – it’s positive for broadcasters, but its financial impact is limited.
No wonder then that targeted television ads are already in use with on-demand services; Channel 4 earlier this year rolled out a tool letting brands use their own data to match ads to audiences. But swapping out ads is a bit more difficult with live television. “The key technology is combining what is called addressable advertising, which is personalised, with programmatic systems, which is enabling the purchasing of ads automatically,” says James Blake, director of the Centre for Media and Culture at Edinburgh Napier University.
According to Sky, AdSmart turns your set-top box into a local ad server, downloading and storing commercials deemed relevant based on the data the company holds on you. When watching an AdSmart-enabled channel, those ads will be swapped into the commercial break spot; if there are no AdSmart ads available – or you’ve opted out – a generic commercial is shown instead.
To do this, AdSmart and broadcasters that use it require data about viewers. That could be limited, as a local small business could target a handful of postcodes, with a different ad shown to everyone else, with no personal information required. Sky says that location is a key attribute, though there are thousands more, noting that Huddersfield Town Football Club advertises season tickets locally; there’s not much point in showing that commercial to football fans in Scotland, after all. Location can also be used to target ads more carefully using demographic information; if a neighbourhood is more likely to have family homes, showing ads targeting parents makes more sense.
But targeting those ads more precisely – such as showing pet food ads only to those with cats and dogs – requires more data, which broadcasters purchase from third-party data brokers. Sky, for example, says it can select viewers in groups of 5,000 or more based on age, location, lifestyle, and “even if they have a cat”, using Sky’s own customer data, information provided by the company wishing to advertise, and data bought in from third-party brokers such as Experian, Dunnhumby, CACI, 20ci, Mastercard, Emma’s Diary, and Game. Companies such as those have already been targeted with GDPR complaints for exploiting our personal data and selling it on to marketing companies. If you want to know what data Sky et al have gathered on your family, you can file a subject access request.
Technically, it’s possible to make addressable ads more tightly personalised than those groups of 5,000 used by AdSmart, but there’s a danger that could put viewers off, notes Blake. “I think TV companies and broadcasters need to be careful how they use personalised advertising,” he says. “There’s a risk these adverts can be creepy.” Blake points to an experiment in 2017 when viewers on the Channel 4 app were shown adverts with their own names, which some people found “a little bit creepy”, he says.
There’s another reason TV commercials aren’t likely to get quite as personal as online ads: they cost more to make. “You’ve got additional costs for producing high quality TV adverts – the creative process in itself is quite expensive,” Broughton says. “So this is about refining your spend, as opposed to micro targeting a specific segment.”
While there’s merit in avoiding ads for products you’d never buy, such targeted ads could also be used for political marketing – and that raises concerns for democracy when we’re not all seeing the same message, though Blake notes that broadcast television advertising in the UK is heavily regulated. “That’s one of the big reasons why TV is trusted in the way it is,” he says. “But we need to be aware of the risks because TV adverts can be hugely powerful and we don’t want political campaigns and parties to misuse that. There is a danger that you end up in a bubble of like-minded people with like-minded messages, and don’t get exposed to sentiments on the other side.” However, in the UK, such commercials are banned, with unpaid allocated spots given to the parties instead.
And that’s another reason TV ads aren’t likely to be as invasive as online counterparts: they’re heavily regulated. Broadcasters face tighter regulation than online advertisers, and GDPR should limit how personal data is repurposed for marketing. “Addressable advertising in TV took a hit when GDPR came on board,” says Blake. “Before GDPR, there was a lot of discussion about how cookie data [from web browsing] could feed into adverts. And I think GDPR made that process take quite a big hit.”
Both Sky and Channel 4 say they follow GDPR’s rules, and both allow viewers to opt-out of AdSmart, with Sky adding that any “special category data”, such as information about your health, needs consent to be processed by AdSmart.
If such ads do come off as creepy, you can opt out – and not only of AdSmart, but the broadcasters themselves, something they’ll be wary of. As Broughton notes, angering customers doesn’t have much value to broadcasters such as Sky that can cost up to £70 a month. “It’s not worth jeopardising that to get a few extra pence out of an advertiser,” he says, predicting that “they’ll err on the side of caution.”
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