IPTV advertising focuses on and highlights one important aspect: more targeted advertising … to the extent that you for the first time enable local business advertising on an organized scale. I briefly spoke to UK based PacketVision on the subject. PacketVision works with operators and channels enabling them to beam different advertisements to different IPTV viewers determined by various factors which could be demographic, geographic or other factors like interests and preferences of these viewers.
Obviously this sort of advertising works if you have an updated and reliable database of demographic profiles. How is an operator or a channel going to have data on things like income, profession, interests, hobbies, gender etc about its customers so that it targets the right ad to the right person? According to PacketVision, initially the segmentation of the operator's TV subscribers will be based on what they (the telco) know about them e.g. location and perhaps the financial band. As they hold only a very limited amount of info on each subscriber the main targeting will be geographic to start with.
PacketVision is talking to a number of data providers such as Experian, who can provide full demographic data (62 different profiles) on every household in the UK, France, Spain etc. The company plans to bring this data to the telcos to enhance the data that they currently hold. The final stage is to provide the telco with tools to analyse their subscribers based on their TV and/or website viewing history. So the expected sequence is geographic targeting, telco CRM-based demographic targeting, full demographic targeting using third-party data, and finally behavioral targeting.
It will obviously take a long time before advertisers can handle this level of segmentation, so they will be happy with very simple targeting initially.
Targeted advertising will do wonders if you have local businesses and corner shops being able to advertise on local household TVs. However the telcos and channels do not have the capability to sell ad slots to local small businesses though some have their own Yellow Pages salespeople. Generally speaking the ad agencies only work with major brand advertisers. What is needed for this market to scale and take off is a web-based ad /media-buying agency able to provide self-help ad creation, campaign management and ad slot purchase. There are a number of companies starting to offer these services e.g. Spot Runner in the US and Spotzer from the Netherlands.