TV ads will soon be watching you
By Edmund Sanders
Los Angeles Times
WASHINGTON - Americans have been watching television commercials for more than 50 years. Pretty soon, commercials will be watching them.
Cable and satellite giants are installing technology that will enable them to zap targeted TV commercials to homes based on occupants' age, gender, ethnicity, income and other personal details, including the shows they watch.
If neighbors are watching "West Wing" at the same time, the household with young parents will see an ad for Pampers diapers, while the retirees next door learn about the bonding strength of Fixodent. Wealthy homeowners might see ads for Nordstrom, while lower-income renters see commercials for Wal-Mart. Chevrolet could tout Corvettes to single men and Suburbans to families with kids.
Eventually, companies hope to refine the technology to target different viewers in the same family. They might send ads for the new PlayStation 2 to the teenager's room while reserving the life-insurance pitch for Mom and Dad in the den.
AT&T, the biggest U.S. cable operator, plans to test such "addressable advertising" this fall on 30,000 customers in Aurora, Colo., who have upgraded to digital cable, which makes the targeting technology possible. An AT&T spokesperson said there currently are no plans to conduct tests in the Puget Sound region.
Other cable and satellite companies, including Cox Communications and Time Warner, are expected to follow with their pilots. If all goes well, software developers predict a large-scale roll-out of targeted TV ads could begin next spring.
But will consumers embrace the technology as a convenience or view it as an invasion of their privacy?
The cable industry is betting that consumers will focus on the pluses, much as they have embraced supermarket loyalty cards that track purchasing habits in exchange for discounts and coupons on products they frequently buy.
"If I told my male friends they'd never have to look at another tampon commercial, they'd say, `Sure. Here's my information. Sign me up,' " said Vicki Lins, a senior vice president at Los Angeles-based Adlink, which is developing addressable advertising in Southern California.
But Jeff Chester, president of the Center for Digital Democracy in Washington, an organization that analyzes new information technologies, worries that addressable advertising and other interactive features will allow cable companies to amass invasive profiles on what consumers watch and what they buy, perhaps without their knowledge.
Chester noted that cable companies would be able to monitor when a household's television set is turned on, giving them information about when customers are likely to be at home.
He said Congress needs to tighten federal cable laws to ensure that companies cannot collect information about subscribers without first disclosing their practices clearly and obtaining subscribers' approval.
Under the 1984 Cable Communications Policy Act, cable operators must disclose annually what type of personally identifiable information they collect about subscribers and obtain approval before sharing it. How the law would apply to customer information used internally by a cable company remains unclear.
Cable and advertising officials insist that they are moving slowly with the new technology. Some companies may offer incentives, such as monthly rebates or premium channels, to those who sign up.
"This is an opportunity for customers to get information that is more relevant to them," said Tracy Baumgartner, a spokeswoman for AT&T Broadband.
Cable companies hope advertisers will pay twice as much to reach targeted households.
AT&T stressed that advertisers taking part in its pilot - who have not been identified - will not be privy to personally identifiable information about subscribers.
ACTV, the New York-based software developer hired by AT&T and a leader in addressable advertising, says it does not plan to track television-viewing habits in the AT&T pilot, although such monitoring would be possible, chief technology officer Kevin Liga said.
Instead, the company will help AT&T initially separate viewers into one or more of four demographic buckets: families with and without kids and those earning less than $50,000 and more than $75,000. Every household would fall into one of the first two buckets, and most also would be included in one of the second two.
The information will be gathered by searching AT&T's subscriber records and by running subscribers' names through various outside databases.
Such consumer profiling is not new to cable companies. Time Warner, for example, is being sued for creating and selling profiles about subscribers, including whether they buy premium channels such as HBO and Playboy.
Baumgartner said AT&T will send notices to customers informing them about the targeted ads and giving them an opportunity to opt out.
If consumers respond favorably to pilots such as AT&T's, advertising officials predict that ads could be targeted within the same household.
With the emergence of interactive TV, viewers one day may log in to their sets, just as they do with computers, allowing them to preset preferences for what types of shows they like to watch and what types of ads they would prefer to receive. Consumers might be able to use their remote controls to request additional information about an advertised product or ask that a coupon for the product be mailed.
Gary Ruskin, a frequent critic of the commercialization of culture, worries that such targeted advertising may be harmful to children by making it easier for vendors to deliver their message.
"This could take control away from parents who are trying to shield their kids from commercial culture and allow advertisers to bypass the parents," said Ruskin, director of Commercial Alert, an advocacy group.
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