Thursday, September 29, 2011

Addressable Advertising and Viewer Profiling: Consumer Privacy at Stake

Addressable advertising is the new marketing platform being implemented by TV providers and online search engines that is using data mining applications, Viewer Profiling Modules (VPM) to track individual viewer behavior and creating profiles used to produce predictions about viewer characteristics. This type of information is being collected by third party companies such as Kantar Media and being distributed to companies like Nielsen for advertisers to customize ads for targeted demographics. The data being collected can consist of viewer’s age, HH income, number of children, pet owner, credit card information, shopping habits, occupation, marital status, car buyer, ethnicity, and education. This type of information is very valuable to advertisers because it will reduce wasted inventory, target fewer households which limits opportunity costs, and increases financial gain.

Three privacy issues that arise concerns about addressable advertising that I will focus on throughout my analysis are the procedures being used to collect and distribute information, the perceived outcomes of these procedures, and the accuracy of the inferred personal profile information. There are personal video recorders (PVR) like Tivo who collects information about the length of time spent watching commercials and what commercials were watched that do a good job of communicating with consumers of their practices and conditions. Tivo and other PVRs also have different options for consumers to protect their privacy such as Opt-in, Opt-out, and Opt-neutral. But, there are other data mining companies like Spyware that use techniques that abuse ethical constraints by installing software on users PCs without notifying audience. This brings up the issue of whether or not people are aware of the extent they are being tracked.

I will also do a cost-benefit analysis of addressable advertising for the consumers and the companies exploring benefits like monetary compensation, product discounts, accurate viewing recommendations, more relevant advertising, and the financial advantages for advertisers.

It is very difficult to find a privacy violation within the data mining techniques and it is also difficult to assign a monetary value to privacy because different individuals have different values attached to their privacy. I will look into the regulations on addressable platforms being implemented by the FTC and the FCC. I will also touch on the mandates and the practices used by the different company’s addressable platforms such as DIRECTV, Google, and Facebook.


  1. Matt, this a great topic that you have picked up!
    To some existent I think this is a great marketing tool, figuring out what your consumer wants and directly providing them with that information. This is a production companies dream come true. On the other hand this is a major breach in our personal information. I think you should touch on the "terms of agreement" that we usually come across when we sign up, download, and or purchase something online. Are we signing our privacy away when we accept the "terms of agreement"? I find it interesting that no matter how private we think we are being online (facebook) someone or some company will have access to our "private" information.
    This past summer I traveled out of the country, and the hotel I was staying at asked for my email address. With in 24 hours I had over 400 spam emails. Never having this problem before I assumed that the hotel sold my address to advertisers (is this legal?) If so, is this form of advertising successful?
    Lastly, I would like to know is our personal information only being used for advertising/ marketing purposes?

  2. This sounds like a great topic to study. It is crazy to think how much information is out there about a person. Also that most of it was supplied indirectly (i.e. how much you watch a certain TV show). I really like that you thought of doing a cost-benifit analysis because that is at the core of advertisement industry. One could argue that since these companies know so much about me they will show me products I am interested, but on the other side when does knowing too much cross the line