(This piece originally appeared in the TooMuchTV newsletter)
One of the things I learned during the recent WGA and SAG-AFTRA strikes is that nearly everyone in Hollywood is clueless about how digital TV advertising works. They seem to think of it as some slightly teched-up equivalent of linear TV advertising.
And that's why when Netflix announced it was releasing more viewing data, the take from a lot of people in Hollywood was "oh, they're just doing it because Netflix is focusing more on advertising and advertisers won't buy ads if they don't know who's watching." Which is not at all how things work in the digital advertising world.
This is an INCREDIBLY simplified explanation of TV advertising. But it will serve the purposes for now.
Linear TV advertising tended to be centered around buying the anticipated audience. Advertisers bought ad time based on what they thought the audience would look like based on a series of data points that ranged from the previous audience for a network or show to the audience advertisers suspected would be attracted to a specific cast or series premise. Networks promised an audience of a certain size and adjustments were made after the fact to make sure advertisers got their money's worth.
Digital TV advertising on platforms ranging from AVODs such as Pluto and Tubi to vMVPDs such as YouTube and Hulu TV can offer a much more target approach. Although nearly everyone in the digital advertising industry argues about how accurate the targeting is in the real world.
The thing to know is that none of those platforms sell advertising directly to advertisers. Instead, they use outside advertising marketplaces to sell and place the ads on their service.
Much of this is programmatic advertising, which essentially is a simple way of explaining an extremely complicated process. An advertiser wants to place an ad in front of a specific number of viewers with a specific of attributes, which can range from gender and age to location or employment status. The marketplace looks at which shows are a match for that order and places it without much regard to the specific show. It's the demos and the actual number of people watching a show matters only in that it provides a basket of viewers to be targeted.
And while the various ad marketplaces and services have varying levels of granularity, this is done by assembling a database of hundreds of millions viewers. Companies collect hundreds of data points of non-personally identifiable information (non-PII). This is data that cannot be used on its own to identify a person. But it can be used to assemble a profile of an unidentified person that can then be used to sell advertising against.
In other words, in theory these advertising marketplaces might not know your name. But they know thousands of things about you and they use that to build a profile of this unidentified you.
This non-PII data includes location information, internet activity, business phone numbers and race, religion, gender, workplace, and job titles. There is Internet browser history, smart TV viewing data and much, much more.
But there have been some limits to what a company is capable of and/or comfortable doing in order to improve the targeting of advertising. And unfortunately for TV viewers, those limits are being pushed back all of the time.
404 Media has a fairly scary piece about a marketing team within media giant Cox Media Group (CMG) that claims it has the capability to listen to ambient conversations of consumers through embedded microphones in smartphones, smart TVs, and other devices to gather data and use it to target ads:
“What would it mean for your business if you could target potential clients who are actively discussing their need for your services in their day-to-day conversations? No, it's not a Black Mirror episode—it's Voice Data, and CMG has the capabilities to use it to your business advantage,” CMG’s website reads.
With Active Listening, CMG claims to be able to “target your advertising to the EXACT people you are looking for,” according to its website. The goal is to target potential clients or customers based on what they say in “their day to day conversations,” the website adds.
Frankly, this is a scary concept and it's not clear to me if this technology is as accurate and useful as it claims.
But I also can't believe that no one at CMG thought to ask themselves "I wonder if our customers would be bothered by having their conversations monitored in order to improve our chances of selling targeted advertising?
The fact that the monitoring would be done by a computer instead of a human doesn't make it less intrusive. In fact, it feels like a process that is more likely easily susceptible to abuse. Another concept that seems to escape the fine folks at CMG:
CMG said in a statement that “CMG Local Solutions markets a wide range of advertising tools. Like other advertising companies, some of those tools include third-party vendor products powered by data sets sourced from users by various social media and other applications then packaged and resold to data servicers. Advertising data based on voice and other data is collected by these platforms and devices under the terms and conditions provided by those apps and accepted by their users, and can then be sold to third-party companies and converted into anonymized information for advertisers. This anonymized data then is resold by numerous advertising companies.”
“CMG businesses do not listen to any conversations or have access to anything beyond a third-party aggregated, anonymized and fully encrypted data set that can be used for ad placement. We regret any confusion and we are committed to ensuring our marketing is clear and transparent,” the statement added.
But not every potential advertiser contacted views the idea as benign as CMG:
The marketing professional pitched by CMG told 404 Media that after a call with the company, they disabled microphone access on much of their own technology: “I immediately removed all my Amazon Echo devices and locked down microphone permissions on things like my phone as receiving confirmation they are doing things like this have confirmed my worst fears and I, for one, will not take part in it,” they said.
So the short answer is..no. Companies advertising streaming TV services don't need to know the viewing numbers of shows to place their advertising in front of what they hope will be the targeted audience.
