As the cable industry marches boldly into the embrace of addressable advertising—and banks much on the success of its Canoe Ventures—executives seem unconcerned that targeted TV ads will lead to a Big Brother future. Their assumptions are indeed backed up by some evidence: Internet advertisers have been targeting ads using cookies and other devices for years with little outcry from most users. And in most cases, advertisers don’t know who they are targeting—just that these folks share certain surfing patterns that make them likely buyers. So what’s the difference when cable operators bring this level of granularity to the TV environment, right?
Let’s take a step back and assume that consumers are too busy fretting about the economy, the swine flu and their teenaged kids’ “sexting” habits to care about comparatively trivial matter of Toyota infiltrating their household based on a zip code or other demographic info. Does that mean cable operators and content owners can go nuts with Canoe and face no retribution? Not really. In some ways—and there’s no good reason for this—TV is different. It has been a passive medium for so long that people can have a difficult time accepting Internet-like targeting (Plus, George Orwell really messed everyone up with the whole “telescreen” idea). But even the Internet has come under scrutiny lately. Case in point: The Federal Trade Commission on Mon warned Internet firms to self regulate based on FTC privacy guidelines issued earlier this year or face potential new regulation. According to Reuters, FTC chmn Jon Leibowitz said at Reuters Global Financial Regulation Summit that the Internet industry (ie, everyone from Web sites to ISPs) is “pretty close” to its last chance of regulating itself before the feds step in.
Whew. Good thing they’re not talking about addressable TV advertising, right? Guess the cable industry is safe. Uh huh. As soon as cable starts serving up targeted ads en masse in the TV environment, you can rest assured that the FTC will be on it. Congress has already started asking questions, which became apparent last week when NCTA pres/CEO Kyle McSlarrow dutifully walked the House communications subcommittee through Canoe and how it works. He noted that Canoe has no plans to collect set-top info. That’s true. For now, it plans to use other demographic info to serve up ads—although consumers will be able to voluntarily share some personal info by clicking a button to request information or to buy something, in which case billing info could flow to the advertiser. But the real end game here is using set-top info to hyper-target ads. That’s what advertisers want. The question is how soon they’ll get it, and how cautiously Canoe will tread as its technology becomes more and more sophisticated.
Questions from the FTC and lawmakers combine into one big canary in the coal mine here. With Canoe and an all-digital future almost upon us, the cable industry’s power to help advertisers lower their costs and increase effectiveness through hypertargeting will be immense. But it won’t go unnoticed. So cable ops, programmers and their advertising partners might want to set plans in motion now to vigilantly protect their customers’ privacy. Or else someone else will do it for them.