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Knowing the audience is essential for the survival of television

Monday 26 October 2015, by SIGNIS

London, Brussels, October 26th, 2015 (The Telegraph/SIGNIS, Madhumita Murgia) Journalist Madhumita Murgia of The Telegraph recently published an interesting article about television and its audiences in today’s media landscape and the new technology.

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Madhumita Murgia

She starts with the observation that everyone is being tracked online, and advertisers can know your preferences through the “cookies”. In that sense, she says that TV advertising still "lives in the relative Middle Ages. Most television channels can only target an audience based on guesswork – how old they are or what gender they are, based on the type of program they are broadcasting. So, a sitcom like Girls or the Mindy Project would have advertisements roughly targeted at women in their twenties and thirties". This means that some advertisers are showing more and more interest in having an online presence.

The only thing that the TV industry can do is to know its audiences better.

Murgia refers to the decline in audiences that US television had in August 2015: Disney, 21st Century Fox, Viacom and CBS all observed a sharp decline in income. She observes that, according to Forrester Research, advertising on cable and broadcast television is expected to come up at 1 % annually. But some believe it will be much worse and the income will go down with more than three and a half percent already in 2015.

This is not the case for the revenue from digital advertisements. It is predicted that they will grow at 17% a year. "Advertisers will spend more on digital advertising than on TV advertising by 2017", researchers told Murgia. This means that YouTube, Facebook and streaming services like Hulu will grow yearly about 20% which is important. "The reason for this increase is that the way we watch TV is now platform agnostic – and for many internet-first. Whether it’s Netflix, YouTube or other on-demand TV, these services bypass the traditional set-top boxes and instead run via the internet, leveraging all the personal data that comes as a bonus. But here’s the good news if you work in TV: digital set top boxes put TV on a somewhat-level playing field", she said.

She saw the results of Sky Media, which became the first in the UK to attempt targeted ads via data from its set-top box in early 2014: "The platform lets brands target specific households, based on their post code and 90 unique attributes (like whether the household consists of just adults, or if there are children, and a rough income level) from third-party data brokers such as Experian who sell this sort of personalised information".
This means that data mining will be applied on TV “for more precise targeting, including attributes like pet ownership, profession and number of cars in a household that can be bought from data brokers".

Further, Murgia writes that NBC Universal did roll out its program in the US this year, where it uses cable set-top box data, along with credit card data, car data and other sources, to tell advertisers which network, and even which program on that network, is more likely to include their target audience. They get “very targeted and unique capabilities that are much more like what advertisers get when they go to Facebook”, according NBC Universal. Data-mining technology has an enormous potential. Some US networks were even able to target people based on their public voting record as political parties attempted to sway swing voters during election seasons, Murgia discovered.

Her conclusion is that it is apparently working. "Sky claimed an ad for a music album, shown only to houses with kids aged 5 to 11, meant parents were twice as likely to discuss buying the album with their children. The next step is to get more granular, become more intimate with your life so the ads actually apply to you, rather than just what your home, supermarket or neighbourhood say about you”.

Further, Murgia sees that companies like Massachusetts-based Clypd are working on automated tools that can swap in the right ad with minimal human intervention – similar to programmatic ads being bought and sold on the web in milliseconds, like a digital stock market. The data brokers will be key figures in the emerging industry of digital TV advertising. She finishes her article with the example of Acxiom, which has an average of 1500 points of demographic, shopping and lifestyle information on every American household. In other countries, like the UK or Germany, there are similar companies. So the business model behind television can only survive, Murgia believes, if it works with these data brokers which will offer or, even better, will sell the specific audience to the advertisers. Murgia is right... in this model, the audience is the product.

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