A Hypertargeting Vision Is Becoming Reality

Consider a world where marketers could target individual TV homes with the precision of direct mail. One by one, distinct messages would be ushered to select consumers who generate most of brand or category sales. And fewer ads would be viewed by people outside the core target, drastically improving media efficacy while driving sales.


Seem like an advertiser's dream? It's not. With quiet serendipity, this very scenario is now transforming from vision into reality.

Media planning and buying remains largely wasteful, as bottled-water drinkers see ads for soft drinks, SUV buyers get messages for compacts and men are exposed to feminine hygiene commercials. These targeting miscues translate to empty media dollars and missed sales opportunities.

But marketers should pay close attention to emerging digital platforms because they provide a trail of electronic bread crumbs to help identify and track consumers' media behavior. A high degree of addressability will create greater targeting precision than ever before and holds the potential to morph standard media targeting into hypertargeting. After all, for most brands, relatively few people drive the bulk of sales. Internet is leading the charge but TV, mobile and satellite radio will follow. Consider:

• The web currently provides more critical mass opportunity for hypertargeting than any other medium. Well over 100 million people visiting Yahoo, AOL and MSN have registered on those sites or provided some kind of identifying profile information. And while it's great that those portals have this information, when combined with a marketers' client customer data it becomes a virtual lynchpin.
  
  
• We're at an inflection point in TV targeting, driven by the rapidly growing home base of digital set-top boxes and the emergence of software to handle complex instructions for serving up the right commercials to the right people. The likes of CTN, Oxygen TV and Multichoice might as well get into the game.
  
  
• Mobile phones potentially offer a wide array of targeting opportunities as subscribers are traveling, shopping, etc. But phone providers are leery of making this on-location messaging available to advertisers as they fear consumer backlash in a highly competitive environment. The Trojan horse to open up mobile potential could be video advertising on phones, because many customers will agree to take the ads in exchange for video content.
  
  
• Fueled by on-air personalities like Howard Stern and Oprah Winfrey, satellite radio is quickly gaining consumer penetration. Within the next year, XM Radio will be replacing its existing radio units with sets that provide one-to-one targeting capability and advertising opportunities on several of XM's channels, including news and sports.

Marketers should stand ready to snare the opportunity. We recommend preparing for this by:

Re-thinking targeting: Ask whether your media plans are delivering the key customers and prospects that drive the business. Clearly defining who these people are is the first step to better targeting. Then take a very close look at the relationship between targeting and advertising response, scouting for opportunities to ramp up impact.

Testing, testing, testing: You will only know if hypertargeting works by setting up studies that will isolate the impact of targeting and whether the consumers you've identified as the target are more likely to respond to a campaign or promotion.

Do some double dipping: Don't just re-think targeting, re-think advertising paradigm, as hypertargeting and addressability will go hand-in-hand with vanguard, provocative forms of creative. This is an opportunity to explore the best of both worlds. What's going to work creatively? You can't rip a 30-second spot off.

Make the future now: Encourage cable operators to speed up their roll-outs, push internet targeting to new limits and stay tuned for the mobile opportunities about to unfold. Put some money out for R&D so you're in an excellent place when these technologies become mainstream. This is not about reaching critical mass in media, it's about testing for the future.