• by David Goetzl  @dgoetzl, July 10, 2013

Advertisers covet addressable advertising. To use a cliche that needs to be banished, it obviously offers the potential to cut down on waste by only reaching dog owners with dog food ads.

But only a cynic would say marketers have no shame in the privacy realm with those type of pursuits. A few years ago at an industry conference, GroupM chief Irwin Gotlieb effectively said God help us all if we don’t adhere to a certain honor code.

Would a beer marketer really want to capitalize on technology from pay-TV operators that could detect what’s happening in front of the screen? So, if a viewer is drinking one of its brands, it could have an ad for it appear in that home, maybe before the last swig.

Apparently, Verizon thinks so – or at least wants the ability to do it. In an application that was denied, it sought a patent on technology that seemed able to use a camera in a set-top box to capture everything going on in front of the TV. Then, using the data, trigger a process to deliver a highly relevant ad.

Assuming it wants no part of that, poor Budweiser. Verizon called it out as a potential beneficiary, suggesting its technology can detect a Budweiser can “within a (viewer's) surroundings” and then “select an advertisement associated with the detected object (e.g., a Budweiser commercial).”

Actually, the application offers plenty to banish the dog food cliché (which it uses). A person running on a treadmill might get an ad for health food, for example.

But the technology goes further than simple detection of a product in a room. It offers the opportunity to gauge the state of a relationship or a viewer's state of mind -- then make judgments. Determination that a “couple is arguing/fighting with each other” might bring an ad “associated (with) marriage/relationship counseling.” Or, detection that a viewer appears stressed might bring ads for “aromatherapy candles, a vacation resort, etc.”

The technology is forward-thinking enough to take into account the increasing use of second screens while watching TV. In some cases, it could determine whether a viewer is using a tablet or smartphone and what he or she may be doing on the device -- then deliver a targeted ad on that screen.

“Not only may the selected advertisement be specifically targeted to the (viewer), but it may also be delivered right to the user's hands,” the patent application reads.

A Verizon statement issued to multiple outlets late last year said the company has “a well-established track record of respecting its customers' privacy and protecting their personal information,” but it “prizes innovation.”

Of course, that was before the explosive report that Verizon has been giving access to the phone records of Americans to the National Security Agency. So, it isn’t likely to do much to fight the proposed “We Are Watching You Act” in Congress, which could curtail any cameras in a set-top-box playing in the addressable advertising game.

Verizon, which may have had no intention of using embedded camera technology, isn't the only one experimenting with viewer recognition systems. The Wall Street Journal reported an Intel executive said in February the company has a set-top box with facial recognition abilities to determine who is watching. Tech site GigaOM reported back in 2008 that a Comcast executive said the company was developing viewer recognition technology that could help deliver targeted ads.

The NSA matter and reports about the technology prompted Massachusetts Democrat Michael Capuano to introduce the “We Are Watching You Act” last month in the House. The privacy concerns even prompted bipartisanship as North Carolina Republican Walter Jones joined him.

“I actually thought it was science fiction when I first heard about it," Capuano told C-Span about the embedded technology. "I thought OK, what’s the punch line?”

It’s a pretty simple bill, but could really frighten TV viewers -- notably older, non-tech-savvy ones. When the detection cameras are in use, “We Are Watching You” must appear on the screen in a color and size that is pretty “easily readable,” the legislation requires. Consumers can decide to opt out and a video provider must provide them with service without the functionality.

Capuano said he gets the benefits for marketers. “I understand the desire for them,” he said. “The intent is to be able to micro-target ads”

The recognition technology isn’t only in play to deliver ad messages. It also has a role as recommendation technology, allowing operators to recommend potential viewing options – just like Netflix. Sony uses facial recognition in TVs to improve picture and sound quality for people depending on where they’re sitting.

If a viewer doesn’t want any risk of being watched, Comcast CEO Brian Roberts told C-Span, the technology can “easily” be disabled with a single click. While advertising may be a different arena, he did say younger people are more open to their personal information in the public sphere.

Who knows what the odds are of the Capuano-Jones legislation going anywhere. But it’s on the books and that alone should stunt the technology becoming an advertiser benefit.

What company would want to be part of any initiative that could have “We Are Watching You" overlaid on their ads? That’s so 1984.