In the west London offices of NDS, the firm behind Sky's set-top boxes, 24 is playing in tandem on two screens. "You're going to be underwhelmed," says Nick Thexton, senior vice president of new initiatives, with a smile. But that's the point: this experience should be wholly undetectable to the viewer.
As the on-screen digital clock counts the seconds to the commercial break, the two TVs, previously humming together, snap apart. One serves an ad for Gillette, the other a Seat commercial, each discretely inserted by the respective set-top box's hard drive. "This is the presentation that Rupert Murdoch saw four weeks ago," Thexton says. It is also the future of television advertising.
By 2011, Sky says it will be able to deliver directed advertising ("Smart TV") by using viewers' set-top boxes to insert commercials targeted to them individually. "All the boxes with a particular profile will take a decision and play a particular advert," Thexton says. "It could be regional, it may link to demographics and age range. The viewer isn't aware of being targeted."
The next step is for the software to select viewers even more precisely using assumptions from viewing behaviour. "When we watch television, we supply information about our dreams and desires," says Thexton. "You might discover that someone is interested in cars and that they're more susceptible to your message now than three months ago."
One possibilty for Sky is to go beyond oblique correlation: subtle ways of interpreting data will allow more acute observations. "You can account for someone falling asleep from past channel-changing patterns," Thexton adds. "And you can use the way people navigate around the guide with the remote to detect the signature of individuals in a household."
Sky already knows a great deal about its customers from their sign-up information. Stephen Nuttall, director of Sky's commercial group, sees the possibility of building in "other data sources anonymously". This could come from financial-data company Experian, or loyalty-card schemes. But Sky says it's too early to comment on whether receiving targeted ads will be a condition of signing up with the provider.
To a loyalty-card data processor such as Dunnhumby (the force behind Tesco's Clubcard), it makes complete sense to use set-top-box data if available. It analyses 40 million shopping baskets for Tesco a week. "We give every product a DNA - the reasons people buy it," says chairman Clive Humby. "And then by accumulating that data we can start to understand buying motivations: you're looking to save the planet, you're trying to stand out from the crowd..."
Smart TV adds a whole other dimension. "What we'd really like to do is match your digital media consumption - the websites you visit, the TV programmes you watch, the radio stations you listen to - to your shopping behaviour," Humby says.
Linked-in media data is the dream. "If I knew your whole transaction profile - restaurants, travel, fashion - that could be immensely powerful," adds Humby. "You'd need a consent-based model, but you'd understand every aspect of a person's life. The credit-card data tells you how they live generally, the supermarket data tells you their motivations, the media data tells you how to talk to them. If you have those three things, you're in marketing nirvana."
So is Dunnhumby already talking to Sky or NDS? Martin Hayward, its director of strategy and futures, is guarded: "We've got various conversations going on." But he will confirm that the firm hopes to link with viewing data "within the next 12 months".
This is just one element within Wired UK's special report on the new hidden persuaders. You can read the introduction to the special report here and a selection of the other articles here: - Data that define your retail options
How the TV watches you
When advertising gets in your face
Mining your mobile phone logs - Your unconscious mind has already voted - Now marketing gets sniffy - Neuromarketing is a go - Eye-tracking adverts - Your secret shopping personality
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This article was originally published by WIRED UK
