USA Today is reporting that Americans' growing impatience with commercials has forced cable companies to find new ways to target audiences. Several cable companies are beginning to experiment with ways to target consumers directly by sending different advertisements to each neighborhood, or even to different households within the neighborhood.
If given a choice, most will fast forward past advertisements, and as more Americans subscribe to video-on-demand services, TiVo, and Digital Video Recording, advertisers must find ways to tailor their messages to specific consumers:
“If I can deliver dog food ads just to people who have dogs, it's less likely to be fast-forwarded through,” says Bernstein Research analyst Craig Moffett. “This represents a whole new line of business that's very high margin and has never been a significant part of the equation.”
He says it's only a matter of time before cable channels recut their deals with local operators, perhaps giving them more minutes to sell, in order to tap their power to target.
But even direct advertising may not be enough to prevent an average viewer from reaching for the remote:
This is widely regarded as the “killer” application. Ads in conventional TV shows would lead viewers who have digital tuners to advertiser-supplied VOD programs, such as movie trailers, travel videos or a program that provides an in-depth look at a new car.
“Ads are becoming mini-movies,” says David Woodle, CEO of technology company C-Cor. “The whole on-demand space is high growth.”
Another potential development may be the emergence of interactive marketing, commercials that allow you to query for more information or purchase directly from the screen:
For example, a spot for State Farm Insurance asked viewers if they wanted a price quote. Those who answered “yes” with their remotes were then asked if they wanted an agent to contact them. Another spot, with Pizza Hut, enabled viewers to order pizzas with their remotes.
Transforming advertising from an annoyance into an actual service will be the challenge, but, at this point, it is one the industry has no choice but to accept.