• by Josh Herman , October 22, 2007

Nothing has quite the dramatic effect on your media habits, purchasing behaviors, and sleeping pattern than the introduction of a new baby into your household. Remember those first days? Experiencing them right now? Or just shuddering at the thought of it? The behavior changes are swift and resonate throughout your entire household all day, every day. This is why a "vertical marketing list" of new-parent households is such a valuable marketing tool. During these periods of lifestage changes, our previous attachments to brands and products destabilize and we become open to new-product offers -- sometimes, in fact, desperate for new-product offers.

When addressable advertising via digital television deploys more widely those new parents will be able to receive their needed product information 24/7 on whichever channel they happen to be watching instead of waiting once a day for the postal carrier. Knowing which of those TV households are the new-parent households turns the digital TV subscribers into one of the most powerful direct marketing tools out there. But what will it really take for advertisers to make full use of this data-driven TV advertising?

Industries like cable operators, telcos, satellite TV providers, digital terrestrial broadcasters and wireless carriers have gravitated to the idea that they are adding new "advertising" tools, "advertising" technology, and "advertising" revenue streams to their business models. For the digital TV systems, the discussions circle around how to properly get into the targeted advertising business while keeping their subscribers happy and engaged and maintaining their strong track record for privacy protection. However, the business the digital TV systems are moving toward is much more analogous to the direct marketing business than the advertising business in its use of household-level marketing data. In fact, "targeted advertising" is just a euphemism for "addressable advertising" and addressable advertising is really a euphemism for "direct marketing" -- and that's a good thing because we have decades of experience to know that direct, target marketing works.

The good news is that there's lots of data available for making targeting decisions with addressable advertising. The bad news is that there's lots of data available for making targeting decisions with addressable advertising.

To really get the best out of the targeting requires the appropriate coordination of four or five different data sets: advertiser's customer purchase data; digital TV provider's data; third-party marketing data; and survey behavior data.

All of these data sets can be marshaled to answer the following eight questions that drive the best selection for targeted advertising messaging.

1. What are the distinctive demographic and consumer characteristics of the digital TV consumer universe that's able to receive the targeted TV ad?

2. What are the distinctive demographic and consumer characteristics of the consumers who currently purchase the advertiser's product?

3. Can the characteristics of the recent purchasers be segmented into a handful of distinct target groups?

4. How many current advertiser customers already live in the reachable digital TV footprint?

5. How many prospects (non-customers) can be reached by the digital TV footprint?

6. How many prospects share the same characteristics of the target group populations more likely to respond to the ad most quickly?

7. How many prospects are less likely to respond to an immediate call-to-action during the campaign and what should the messages be for that population?

8. So that targeted creative and offers can be crafted, what do we know about the demographics, consumer behaviors, and viewing preferences for the current customers; the likely-to-respond prospect target groups; and the balance of the reachable prospects in the digital TV footprint?

With this framework, addressing these questions is commonly done in direct marketing using established data integration tools and techniques. Once those data sets are appropriately integrated and enhanced with the marketing data, it's possible to analyze and discover the distinctive characteristics that go toward defining and describing the digital TV subscriber and the advertiser's best customers and prospects in that digital TV universe.

The lines of separation between advertising and direct marketing are disappearing and the digital TV systems are poised to bring value to the consumers in the form of greater relevance; value to the marketer / advertiser in the form of a more powerful and effective targeted media choice; and value to their shareholders in the form of a potent, proven business model of the powerful direct marketing business!