New methods of consuming TV means new methods of delivering ads. As the cord-cutting revolution continues, we're going to see new experiments with monetizing your attention. Here's one such experiment: The commercials shown to Google Fiber's television customers in Kansas City will be tailored to their viewing history.
"Fiber TV ads will be digitally delivered in real time and can be matched based on geography, the type of program being shown (eg, sports or news), or viewing history," the Google Fiber team wrote on its product forum page on Friday. The news was first reported by the Kansas City Star.
This is, of course, exactly how Google makes its gobs of money. Ads on the internet existed before Google, but Google's personalization of ads based on search terms, email contents, and other activity online allowed it to charge more for "competitive" keywords and more closely personalized. Cracking this code is what allowed Google to become the powerhouse that it is today—so it's not surprising the company is trying to extend that model to television.
"Digital advertising is coming to television advertising"
And if you're fine with Google's algorithms reading your email, I suppose you should be fine with Google knowing what television programs you've watched. When you think about it, television advertising has been hopelessly outdated: Advertisers know general information about who might watch a certain channel or program at a certain time, but they don't know specifically who you are, which makes it hard to target ads.
As television models fracture, that's going to change. Netflix knows exactly what shows you watch; ESPN knows what teams you root for, your name, probably your age, what fantasy sports you play, and so on.
Of course, Fiber TV subscribers haven't exactly cut the cable cord (instead, they've gone with a nontraditional provider), but the Google Fiber experiment is exactly where we're heading with a-la-carte television and streaming services, experts say.
"One of the big questions is, how do advertising models keep up with this transition away from cable?" Tim Hanlon, founder of the Vertere Group, a consulting firm that works with cable companies, advertising brands, and content networks, told me. "When you watch a sporting event on the WatchESPN app, you often see the 'we'll be back after the commercial break' black screen, but no ads. That's a tremendous opportunity."
That black screen won't be there for long—instead, consumers will be micro targeted (as they already are on YouTube) with ads that some algorithm says will be relevant. This allows the streaming company, Google in this case, to sell its ads at a higher rate, and gives advertisers the promise that they're not advertising diapers to a frat guy somewhere.
"Any time you've logged in or otherwise authenticated yourself, the network operator has information about you that allows you to be granularly targeted," Hanlon said. "That gives them the ability to do programmatic, data-driven advertising, whether it's at a household level, or an individual television level, or an authenticated stream where they know they're targeting specifically to you. Digital advertising is coming to television advertising."