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Jul. 7--Let's say you're 22 years old, live in an apartment and don't like to cook.
It's a safe bet you aren't interested in seeing television commercials for retirement accounts, lawn-care products and the latest kitchen gizmo. That's what the remote control or TiVo is for, right?
But things may be changing. Within a few years, TV viewers may be getting hit with a lot fewer ads that don't fit their lifestyle.
The technology exists now to allow cable and satellite providers to target TV spots to residents in specific ZIP codes or neighborhoods. And soon they will be able to learn enough about their subscribers to send them individually tailored suites of messages.
It's just a matter of how soon video providers deploy the technology and how responsive advertisers are to the idea of tailoring their TV messages.
"The capabilities are here today," John Caezza, president of access and transport for cable supplier C-COR Inc., said last month at the Cable-Tec Expo in San Antonio.
"As this expands, it will allow advertisers to put on ads that interest 3-4 percent of viewers as opposed to just 1 percent. Right now, they're just kind of throwing something out there and hoping it sticks." Using targeted ads delivered over a cable company's fiber optic lines, a shopping club such as Costco could send out one spot to members letting them know about weekly specials or giving them a renewal reminder. Meanwhile, the company could send a separate ad to nonmembers spelling out the advantages of joining.
Or, using digital technology, an entertainment conglomerate could air ads for a new movie that allow interested viewers to click a button on their remote control to see a longer trailer or check area show times.
In other words, television advertising soon could become more like an electronic version of direct mail. The decades-old concept of the 30-second spot may be changing as companies get rid of a scattergun approach and target specific consumers.
"Twenty years ago you could buy (ads on) the four big networks and reach your core audience," said Carmen Graf, senior vice president-group media director for Austin-based ad shop GSD&M. "But now with the fragmentation of that audience, it's become essential that you be more relevant with your message. This is a way to be more relevant." Though Graf predicts it will be late next year before consumers begin to see individually targeted spots, major GSD&M clients including SBC Communications Inc. and Wal-Mart already are interested in marketing to individual viewers.
And video carriers already are laying the groundwork to make it possible.
Time Warner Cable currently allows advertisers to buy ads that run in one or more geographic zones in San Antonio, and it's probably a matter of time before it begins letting them target individual viewers.
"I think it's inevitable," company Vice President Jeff Henry said. "It's kind of a chicken-and-egg situation now. We're just waiting for advertisers that are interested in stepping off in this direction." Likewise, officials with San Antonio-based telecom giant SBC said targeted marketing would be a key component of the video service it plans to roll out to 18 million customers.
"Unlike the cable companies, we have no legacy model we have to adhere to," said John Penney, SBC's executive director of strategy and advertising management. "We're starting with a blank sheet of paper." Meanwhile, Dish Network has already allowed clients to place ads that let viewers interact by clicking their remotes.
Earlier this year, the satellite provider ran 30-second spots for the Mercedes M-Class that let interested viewers hit a button and jump to a channel where they could watch a longer commercial, view photos or order brochures on the vehicle.
A new age of television advertising is close, but analysts warn that those pesky commercials for online dating services and floor wax aren't going to disappear anytime soon.
For one thing, advertisers and video providers still need to iron out privacy concerns.
Although cable companies can track customers' viewing habits down to the individual click of a remote, they'll have to watch out for a backlash if people grow uncomfortable with how much information they collect.
What's more, advertisers and the ad industry will need to rethink the whole structure of television spots as the new forms of targeted and interactive messages grow more common.
"There's going to have to be a tremendous cultural shift for advertisers," said Eric Schmitt, a senior analyst at Forrester Research. "It's no longer just about paying as little as you can to get in front of as many sets of eyes as you can." Further complicating the rollout are TiVo and other digital recording devices that let consumers skip over ads.
U.S. consumers are installing 15,000 video recorders a day, Schmitt said, and the users are skipping at least 90 percent of the ads they record.
"I don't buy that they'll stop fast-forwarding through the ads because they're more targeted," Schmitt said.
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