Wednesday, March 4, 2009

Different ads for different folks?

During the 1990s, there was this one small cable company in the suburbs of Washington DC, maybe about 20,000 customers that had become the first to go 100% digital. It also adopted a very bold pricing strategy: Rather than paying so much for so many channels each month, it went to a pay per view for everything, that is à la carte -- even network programming. The idea was you'd pick ONE show to watch in a time slot, so as not to fall into the trap of channel surfing. For most, the monthly bill actually worked out to what it would have been prix fixe, especially for those who wanted to see just one or two movies on HBO rather than pay to get the channel for the whole month.

But the system went further. It recognized the demographics of each individual viewer and for local station breaks (other than the network commercials) it would feed content on that basis. So, for example, an executive might see a commercial advertising yacht sales or charter airline rentals. Someone towards the middle might see a commercial advertising the next cultural event at Wolf Trap. And for those with lower incomes, this week's specials at the discount supermarket chain.

Or if the same company was advertising to homes, the richer people might see an ad for an HDTV, the "little people" the video game of the week.

Now, there is going to be an adaptation of this in the NYC area, targeting about 500,000 homes with differentiated commercials, with a roll out to all 3.1 million by next year. There was a pilot project with about 100,000 homes last year with "targeted" and "untargeted" ads that seemed to indicate a far higher buy rate for premium services from those who were "targeted."

While people have the right to opt out and just get the "general" feed, this raises major invasion of privacy issues. The claim is they're going solely by demographics and personal information is double-blinded, but who's to stop someone from reverse engineering and getting personal data about someone -- and more importantly, what they are watching and / or ordering?

And don't be surprised if this comes to Canada soon -- the technology does exist since we already have on-demand programming. I don't mind customized ads, but I think I should have the right to opt in rather than being told I must opt out. To not give a choice is basically another version of negative option billing, which is wrong.

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1 comment:

Anonymous said...

This whole customize and personalize everything you can imagine is out of control. Tailored to you commercials?