Know that feeling seeing a really nice sweater on a website, but closing the tab because you thought it was too expensive? And then, five minutes later while scrolling through Facebook, seeing that exact sweater pop-up on the side of your feed again? We already know that when on the internet, you can find personalized ads. You can choose to opt out of these, by ticking off the right box at the cookies pop-up, that show up when opening a new website. We are familiar with these kinds of personal ads, but right now KPN is testing personalized ads on television¹.
It will be possible to show ads for certain tv-shows or documentaries, based on what you have watched before and other personal information. KPN also promises customers to see the same advertisement less often. Right now you could watch a movie on live television and see the same commercial in every break, which means about every 20 minutes. Personalized ads would reduce this, while also providing you with advertisements that might appeal more to your personal interests.
This sounds promising, however a difficulty with this is the length of the commercial break. The length of the personalized advertisements needs to be exactly the same as the amount of time planned for a specific commercial break. Otherwise, you would have different starting and ending times of the television shows, which would lead to big planning problems especially with live television. Another difficulty is gathering data to personalize the advertisements. Gathering data online is easier than gathering data from these type of customers. This might be partially solved if a television network combines online data and customer data, but that depends on a tight relationship with the customer. The growing concern around privacy is making it generally more difficult for companies to use customer data as well².
To conclude, personalized advertisements are currently being tested by KPN and have interesting possibilities for the future. However, there are some difficulties to this, which might explain why competitor Ziggo does not have any plans for personalized television advertisements (yet).
1. https://nos.nl/artikel/2252164-je-buurman-krijgt-bij-kpn-straks-andere-tv-reclames-te-zien-dan-jij.html
2. https://www2.deloitte.com/insights/us/en/industry/retail-distribution/sharing-personal-information-consumer-privacy-concerns.html
Hi Kristina, thank you for sharing this interesting blog! I was not aware of KPN’s efforts in personalised television ads. Considering the increasing use of personalised advertisements and recommendations on the internet, diffusing these to television makes sense. I am curious to see, however, how they will be able to receive offline consumer data without, like you mentioned, violating consumer’s privacy. Nevertheless, if KPN or any other company succeeds in doing so, I do expect personalised ads to go mainstream anytime soon.
Thanks for your contribution to this blog!
Even though there are some difficulties, as you explained in your blog, I think we will be surprised by how fast this kind of advertising will be present in our daily, TV-watching lives. The added value will be huge for advertisers, and they might even put some pressure on providers such as KPN to come with a solution. The number of people watching television is decreasing, digital natives rather watch YouTube content or Netflix. Especially platforms like YouTube already offers personalized advertisements, making it more pleasant to watch for the consumers.
In short, my prediction is that due to the bargaining power of suppliers (advertisers), TV-providers will allocate more resources to find a solution for personalized advertisement. Consequently, personalized advertising will introduced on short notice. Furthermore, if one TV provider will implement this, others will follow quickly. In five years we might not even remember the traditional way of advertising anymore!
Hello Kristina! Thank you very much for your post, personalized advertising is definitely one of the steps the TV industry needs to take in order to catch up with the digital era. But I guess the difficulties you mentioned are not the only ones, concerning the overall effort TV is putting into adjusting in this new era. This makes me think about other steps the television industry has taken (or is about to take) as well. TV producers are starting to share their content online, while some are also producing shows exclusively on their online channels. Somehow trying to compete with, for example, Netflix? Others have also very active presence in social media channels as YouTube, Facebook and Instagram, while they are not only re-publishing traditional TV content, but also generating a totally new one. Unfortunately though, television is the last medium customers nowadays are going to reach in search of content. Major parts of TV’s traditional offering have already been replaced by the other online means, but we have to admit that TV is putting up a great fight towards adjusting in the new standards. What is your opinion about it?
Hi Nassia, thanks for your comment! I definitely agree that TV is putting up a great fight towards adjusting to the new standards. However, I am unsure whether it will be successful and especially, successful enough as customers indeed prefer other media over TV. I think TV will remain in the picture for sure, but the amount of networks might decrease because of entertainment sources like Netflix and news sources like news websites and apps.
Hi Kristina, thanks for sharing, very interesting! I think this is a very interesting development, however I’m doubting whether this will change the game. I think TV might move away from the business and revenue models we are currently seeing. What do you think about this? Do you think that TV will remain in this format or do you reckon we will move to a more subscription based system, like Spotify or Netflix, making advertisement revenues of lesser importance?