The next U.S. President won’t be sworn in for almost two years, but the jostling and positioning among likely candidates has already begun. When candidates consider how to reach potential voters, an increasingly sophisticated weapon in their arsenal will be targeted advertising to reach voters in-between commercial breaks of their favorite TV shows. These “addressable ads” allow advertisers – in this case political campaigns – to pay content providers, such as satellite networks, to reach specific homes. Addressable ads present a sharp departure from previous eras of political advertising that used a “shotgun approach” to appeal to as many potential voters as possible, regardless of demographics, previous political affiliation, or likelihood of voting.
Satellite television providers DirecTV and DISH Network have already embraced this technology by selling data about subscribers’ individual viewing habits to campaigns. Subscriber data are initially anonymized, but with addresses intact, and then matched to the addresses on voter-registration and canvassing databases. According to a USA Today report, once the targeted households are selected, the satellite provider sends the addressable ads to the home’s digital video recorder (DVR), and the ad airs in the next available commercial slot as part of whatever programming the customer is watching. After the ad plays, the remainder of the user’s TV show continues unaffected until the next ad slot opens.
The Economist illustrated “addressable” ads with a theoretical NRA-sponsored ad:
A voiceover says: “In an elegant New York City mansion, billionaire Mike Bloomberg sleeps safely. A team of armed guards protects him. But Bloomberg wants to take away your right to self-defence…And [insert name of Democratic candidate] will help him do it.” The ad never spells out what Mr Bloomberg’s “extreme gun-control agenda” involves, so viewers can imagine that their local candidate wants to grab their hunting rifles.
A viewer with an address in a potentially Republican area might see the above ad, but her neighbor with a record of supporting Democratic candidates, would not. In fact, some research firms can divide the electorate by TV channel, so the NRA campaign can reserve ad slots on the Golf Channel (where 93% of political commercials are Republican) while skipping Comedy Central (86% of ads are Democratic).
The satellite networks’ partnership with Republican and Democratic data shops allows campaigns to individually target more than 20 million households, a number that is expected to increase to 50 million in 2015. In exchange for access to viewer information, networks see a lucrative opportunity to vie for a share of the billions of dollars in campaign advertising budgets up for grabs in every election cycle.
Zac Moffatt, digital director of the 2012 Romney campaign, and co-founder of Targeted Victory, which does audience-based television buying, tells the Washington Post that “Television bought more efficiently frees up resources for everything else.” Addressable ads certainly allow a campaign to free up resources that would otherwise go to buying large segments of TV airtime with no guaranty that an ad will reach potential voters.
According to Paul Guyardo, chief revenue officer for DirecTV, addressable ads combine the “power of a 30-second television commercial with the precision of a piece of direct mail targeted to the individual household level…[n]ever before have advertisers had that level of precision when it came to a 30-second commercial.”
Addressable ads have already proved their worth in the 2008 and 2012 presidential campaigns, and even as recently as the 2013 Virginia gubernatorial race. With a track record of effectiveness, the partnerships between campaigns and content distributors like satellite networks represent a trend of political advertising that is only likely to grow as customer data – and the ability to segment and target those customers – grows increasingly sophisticated.
