Zip Codes Grow Broadcast TV Revenue

For the foreseeable future, broadcasters will not have the capability to insert addressable advertising at the set top box level.  But this technical limitation should not keep the broadcast industry today from investigating interactive technologies that could increase the value of mass media content.


By crafting "pass-through" agreements with cable operators, broadcast networks and local broadcasters could potentially enable viewers to interact with their TV content. In essence, remote control "click" responses would be forwarded, using the return path of cable, back to the source of broadcast origination. Using this method, viewers could click a  commercial and that respondent's opted-in "click" data could be captured by the broadcaster.  Advertisers, with the broadcaster's permission, could then be provided with TV click-through reports linked to their mass media schedules.  

Interactive TV providers should provide the marketer tools to drill down to the zip codes of those consumers that "engaged," via results gathered from follow-up email campaigns sent once interested viewers opted-in and "clicked" their TV remotes.  A car dealership, or fast food franchisee,  would be able to zero in on the exact neighborhood, content, and time of day where its television advertising was most effective. By linking the reach of broadcast to the metrics of the Internet, TV stations could deliver two powerful forms of advertising for every avail sold.  In addition, offline marketing (like roadside billboards or direct mail) could be coordinated within areas of high customer concentration as determined by the "TV click" reports.

Theoretically broadcasters would introduce interactive technologies on a cable-system-by- cable-system basis.  Advertisers would first measure their television campaigns within just a few "interactive enabled" zip codes of each broadcaster.  As more cable "pass-through" distribution deals are struck, zip code penetration will increase and provide advertisers with a more detailed profile of interactive markets.  This managed roll-out approach -- local content and avails ranked by total "clicks" continually adjusted as each market's penetration grows-- could eventually be expanded to include national and syndicated programming. 

Today we use sample-based program ratings and estimated budgets to build a schedule.  But this leaves out of the equation the viewers who could actually be watching the TV commercial and not be counted in the estimate. Interactive television captures that lost value from those channel-grazers. The technology, theoretically, could still allow broadcasters to grow revenue based on audience reach, while simultaneously building a new revenue stream by supplying opt-in "click" data to advertisers, right down to the zip code and household level



3 comments about "Zip Codes Grow Broadcast TV Revenue ".
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  1. Douglas Ferguson from College of Charleston, November 30, 2009 at 3:28 p.m.

    What buyer really wants "reach"? It's like PBS bragging on their cumes. Yes, they manage to reach a lot of people but their AQH rating is teeny-tiny.

  2. Tilly Pick from Development Practice 360, LLC., November 30, 2009 at 3:54 p.m.

    I like your practical way of talking about the possibilities.

  3. Mike Einstein from the Brothers Einstein, December 1, 2009 at 10 a.m.


    I hope you're not teaching a course on television. If so, you would be well advised to understand a few things about reach.

    First of all, your question implies that frequency is more important than reach. Yet frequency is a byproduct of reach. And it isn't a matter of which came first. Frequency is the number of times a specific audience is reached. No reach, no frequency.

    You're also way off the mark on PBS. If you study your Nielsen, you'll discover that pound-for-pound, PBS is the best performing station on the dial. Those "cumes" you dismiss as mere bragging represent the very same folks that show up in the other stations' frequency numbers.

    The irony is that the best station in every market is the one you can't buy.

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