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.