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The spooky world of personalized advertising is now on your TV!


Commercials on TV can be personalized for each viewer.

Several English TV channels have launched an advertising campaign from Sky called AdSmart. Sky claims it can divide viewers into specific groups of 5,000 or more based on their age, location, lifestyle, and even whether they have a cat at home.

Personalized advertising is following us everywhere on the Internet, and now it has decided to take over the TV space as well. Channel 4 is one of the overseas broadcasters that has agreed to use Sky’s " AdSmart " to target commercials. Although such a system is not as "aggressively" personalized as behavioral advertising, which is most often found on the Internet (to show us the shoes we have already bought), it can still have a huge impact on television in general.

" AdSmart " is a system developed by Sky for creating targeted targeted advertising, which are commercials that can be modified and personalized based on the location or other personal data of viewers, even on linear television. Sky has been using this system to broadcast its channels since 2014. This year, "AdSmart" as a technology has become of interest to such companies as Virgin Media and Channel 4.

For viewers, the advantage of this system is that they will only see the ads they want. For example, Sky won’t show you ads for its broadband service if you’re already a Sky subscriber. The company’s research shows that people switch channels 48% less often when they are shown targeted ads. Small companies can target a specific area where their potential customers live, rather than throwing money away at advertising that is broadcast nationally, which is more suitable for large firms.

For broadcasters, the advantage of this system is that they can charge up to ten times the standard rate for advertising. In recent years, advertising revenue has been falling rapidly. “Smart targeting can be beneficial for both advertisers and viewers: it will not only increase ad revenue for advertisers, but also provide viewers with more relevant information," says Yiting Dan, Associate Professor of Marketing at UCL. Richard Broughton, Principal Research Scientist at Ampere Analysis, suggests that this system could increase Sky’s revenue by 10%, and overall industry revenue by 2%.

Therefore, it is not surprising that targeted television advertising is already part of the service package provided by broadcasters. Channel 4 launched a program earlier this year that allows brands to use their data to target ads to their audiences. However, targeted advertising in the live-broadcast mode of the channel is not an easy task for them. “The system relies on a combination of so-called targeted advertising, which is personalized, and specialized tools that allow you to automatically buy it,” says James Blake, director of the Center for Culture and Media at Edinburgh Napier University.

According to Sky, "AdSmart" turns users’ set-top box into a local ad server, downloading and storing commercials deemed relevant based on the data the company holds about its customers. When viewing a channel with the support of the AdSmart system, advertisements will be replaced with personalized ones; if there are no "AdSmart" ads available or the person has opted out of seeing them, then a generic ad will be shown instead.

Thus, AdSmart and the broadcasters that use this technology collect viewer data. For example, a small local company may target only a few zip codes without having any personal information about potential customers. Sky says location is key in this case, noting that Huddersfield Town Football Club advertises season tickets locally; after all, it doesn’t make much sense to show this ad to football fans all over the country, since the team is not that famous. Location is also used to target ads more carefully using demographic data: if there are many couples living in the area, showing parent-targeted ads will be just right.

But more precise targeting of these ads, such as showing pet food ads only to those with cats or dogs, requires more data to be collected, which broadcasters can buy from third-party brokers. Sky claims the company is capable of dividing viewers into groups of 5,000 or more based on their age, location, lifestyle, and even whether they have a cat at home. Using their own data and information purchased from third party brokers such as Experian, Dunnhumby, CACI, 20ci, Mastercard, Emma’s Diary and Game, Sky is able to pull this off. These firms have already received complaints from the GDPR for using customer personal data and selling it to marketing companies.

It’s technically possible to make targeted ads more personalized than the 5,000-person groups that AdSmart creates, but there’s a possibility and concern that this could turn off viewers, Blake notes. “I think TV companies should be careful when they use personalized ads,” he says. “There is a risk that these ads may come across as too intrusive and even intimidating.” Blake cites a 2017 experiment in which Channel 4 viewers were shown ads with their own names, which some people even found " a little creepy ".

There’s another reason why TV commercials aren’t likely to become as personalized as online ads: their cost is many times higher. “You already spend a lot on producing high-quality TV commercials, because the creative process itself is quite expensive,” says Broughton.

Similar targeted advertising can also be used for political marketing. This raises concerns about the observance of the democracy regime in the country, because all people will see different commercials. On the other hand, Blake points out that television advertising in the UK is heavily regulated. "That’s one of the main reasons why a lot of people trust TV," he says. “But we have to be aware of the risks because television advertising can be extremely powerful and we don’t want political campaigns and parties to abuse it. There is a danger that you will find yourself in informational isolation .” It is worth noting, however, that such political commercials are prohibited in the UK .

And that’s another reason TV advertising is unlikely to be as "aggressive" as its online counterparts: it’s highly regulated. Broadcasters face tougher regulations than online advertisers, and the GDPR restricts their use of customer personal data for marketing purposes. “TV-targeted advertising took off when the government passed the GDPR,” says Blake. "Before this, there was a lot of discussion about how cookie data can be used to create marketing advertisements."

Both Sky and Channel 4 say they are following GDPR rules and are giving viewers the option to opt out of "AdSmart". However, Sky adds that any “personal data”, such as information about your health, needs consent to be processed by AdSmart.

According to Wired magazine.