• by Justin Evans , June 13, 2014

Facebook’s announcement that its mobile app will start to act like Shazam and “listen” to your music and TV choices has struck some as creepy and invasive. Privacy is always a concern to me as a person. But as a professional, what’s interesting is the fact that Facebook is helping the TV data revolution go massively mainstream.

That revolution is being fueled by an emerging class of TV data-gathering, using a process called automated content recognition, or ACR.

ACR listens to the unqiue audio or video signature of programming (music, TV shows, etc), then links that signature to a database so that the programming can be identified. The database tells you the name of the program or song, and other information like artist or network, date of release, and so forth. That’s what happens when you listen to Shazam.

What’s revolutionary is that ACR is democratizing TV data gathering, promising to inject into the marketing and media mainstream what had been the preserve of very expensive market research. 

It’s worth considering how this data revolution works.

On the database side, TV networks -- hundreds of them, with constantly shifting schedules, including new shows, repeats, syndicated and library content; with thousands of programs; running 24/7 -- must all have their content coded. And the content must be coded in its entirety, meaning every second of programs’ video and audio, so if the user tunes into an incomplete show -- which is inevitable -- the linkage (the Shazam moment) can still happen. That’s a monster storage and data challenge -- or would have been, before the costs of data storage dropped in recent years.

But creating databases of content signatures and metadata is only half the problem.

The other half is listening for this data “in the wild,” so marketers can understand how real consumers are using their TVs.

This change is being driven by two main factors.

One factor is the advent of connected TVs. Each one of those smart TVs has an operating system, which can have software installed that will, effectively, listen to what’s playing on the TV. The software can then push the viewing data off the TV, into a storage database.

One problem with connected TVs as a source of insights, however, is that owners of connected TVs might create a biased sample. (Presumably, richer and nerdier.) The ubiquity of smartphones solves that sample problem. 65% of U.S. mobile users have smartphones. There is a representative sample in there. Each one of those people -- as Facebook is demonstrating -- can now be a small, mobile Nielsen family, passively recording their TV viewing behaviors, and creating another big data asset for marketers to draw on.

But there are still challenges to be overcome before ACR data can benefit marketers in a major way.

First, the TV viewing data must be linked to an individual or household. The owner of the smartphone or the smart TV must have an anonymous identifier.

Second, once the data is linked to an identity, TV viewing behaviors need to be matched to other consumer databases. These are the databases that reflect the behaviors and characteristics marketers care about (“owns a Ford F150”; “makes $50,000-$75,000”; “shops at Home Depot”).

Third, the data has to be harmonized and produced as insights, and distributed to marketers, agencies, and media companies.

But why go to all this trouble?

U.S. advertisers spend $74 billion, or 39% of their ad budgets, on the TV medium. So if advertisers can optimize their spend with better data, there is an economic value of $740 million for every available “point” of efficiency gained. That efficiency will come from creating a better match between ad, program and audience -- optimizing, in other words, marketers’ largest single media expenditure.

Questions remain, however: How long will it take to gather ACR data without bias, to link it to meaningful consumer information, to reassure consumers that their privacy is protected? Is Facebook trying to create a TV data business? And, given the robust economic success of the TV industry, and the natural human resistance to change: Even if we can optimize TV dollars -- will we?