Politicians have a problem. Every two years, they pump billions of dollars into the TV advertising industry, but untold numbers of those dollars are spent reaching people who have zero chance of voting for them.
Sure, candidates can narrow down their ads by media market, TV station, and time frame. But even with those frames, television messaging still falls far short of the precision displayed by ads in your Facebook feed or Gmail inbox.
Enter addressable advertising.
It's a technology that's been around for years, but is only now starting to gain a foothold in the TV ad market. And it could change the way political candidates enter your living room.
Addressable advertising allows campaigns to reach viewers not by district or neighborhood, but by individual household. Ad-makers can select individuals, based on what they know about them, then pipe ads through their DVR or cable box—and only when they know the TV is on.
The technology can get very specific; DirecTV claims ad-makers can mix and match from more than 200 household attributes as they choose who views what ad.
Recent graduate? Don't be surprised to see ads about college debt. Meanwhile, your next-door neighbor, the one with the shiny new car, is simultaneously watching an attack ad on a candidate's plan to raise the gas tax. Down the street, the Spanish-speaking family that just moved in is seeing an ad in their native language.
So how do ad-makers make sure their pitches meet the right eyeballs? It starts with data. Campaigns and data brokers have been collecting information for years. Your voting history, income level, family situation—it's all at their fingertips. Now they're discovering the power of matching that information with your cable box or satellite receiver.
This is done anonymously; selected attributes are matched to the receivers of the matching households, not the account holder's name. Laws prevent ad buys that go below 1,000 households for fear too-specific targets could reveal users' identities.
After the households are selected and assigned their various ads, campaigns can wait for a given time or save the ad in queue until someone is watching TV. With satellite, for instance, ads are downloaded into the DVR when it's turned off, then inserted into an available commercial slot once someone's watching. Cable, with its greater bandwidth, can just pipe ads in from afar when a slot opens up.
Some pay-TV companies have been testing addressable advertising since 2010, and they've been touting its potential benefits since at least 2012. At present, it's estimated the technology can reach 37 million households. And carriers see a political future. DirecTV and Dish Network announced earlier this year they were teaming up to let campaigns access all 20 million of their combined subscribers during election season.
"The way [television] is being bought now is so broad and generic," said Tim Kay, the political strategy director for NCC Media. His firm partners with giants like DirecTV, Dish, and Comcast to bring targeted ads to viewers. "A lot of times people use broadcast [advertising] for name recognition."¦ It could be done better. You can turn out that persuadable universe, you can reach out and get additional people that you normally wouldn't because you're targeting them with a specific ad that's relevant to them as opposed to a generic one."
The possibilities are nearly endless. Campaigns could urge people they believe to be supportive but who are not yet registered voters to sign up before the election—a pitch that's much more effective in a personal on-screen appeal than in your spam folder. Interactive ads could allow campaigns to pair their ads with a link to donate right from the TV screen.
What is certain is that the powers of targeted TV ads are only just being discovered. "We're really just scratching the surface of what can be done when it comes to TV," said Chris Hock, an executive at TV advertising firm Black Arrow.
The only real limits, he said, are on just how many ads a campaign has the capacity to create. "[When] does your audience become so small that you just don't have creative [staff] for it?" said Hock.
For the time being, most industry experts agree that making five different ads for different audiences is about the right number, given the resources of today's campaigns.
What is in dispute is the best way to pair data and message. Seth Haberman, CEO of Visible World, which provides targeted TV ads, says it's all about turning out the base. "TV doesn't change people's minds, but what it does is to get people to vote who may not necessarily have voted," he said, drawing comparisons to the Obama campaign's successful efforts to earn votes from low-turnout segments of the Democratic electorate, namely young people and minorities.
For Kay, though, addressable advertising's power means swing voters should be getting more focus. "It's about finding that audience that's persuadable and reaching them with a specific ad," he said. "To have have that extra information matched to the actual subscriber helps data firms and campaigns identify persuadable voters."
Regardless of how campaigns use the technology, its reach is growing. One recent estimate pegged its scope at 37 million households. Dish and DirecTV say they can reach a combined 20 million households. New York-based Cablevision says it covers nearly 6 million households on its own.
And while viewers may think the growth and reach of targeted advertising will just make TV watching more obnoxious, Haberman thinks its consequences could be far greater in worsening the country's political polarization. "People go to what reconfirms their worldview," he said. "Can you imagine if only one side [of voters] saw the ad attacking the other side? The one thing we want to avoid is, because of personalization technology, we just reinforce our current biases by only seeing the things that are directed to us "¦ as opposed to the broader message that is supposed to appeal to everyone."