The Promise of IPTV
Want to sell a hair straightener to African Americans in Yonkers, NY, without wasting money reaching white consumers in the neighboring enclave of Bronxville? No longer will television advertising be out of the question for you. Internet Protocol Over TV (IPTV) promises to enable marketers to pinpoint commercials to niche groups of potential customers in the same way that they can via the Internet.
Under cable technology, operators send video streams to every household with set-top boxes acting as arbiter. But with IPTV, a telephone company can send individual streams of video to each viewer’s set just as the Internet does with PCs. Want to reach cricket fans? IPTV is designed to allow marketers to do exactly that.
“Think of the application of that to advertising and being able to do very finely targeted advertising,” said Ed Graczyk, director of marketing for Microsoft TV, at the CTAM cable marketing conference two weeks ago in Philadelphia. Providers will be able to send one ad to a set that is tuned to Nickelodeon and another to a set in the same household that is tuned to A&E. “There is no reason I would have to watch a Craftmatic adjustable bed [commercial] in my life. I’d much rather see a more relevant ad.”
Verizon has been spending billions of dollars across parts of 15 states, mainly in the Northeast and Mid-Atlantic regions, to replace its copper phone lines with fiber optics. Unlike cable’s fiber plant, which stops about a mile from the home, Verizon is extending fiber straight into the living room, so that it will be able eventually to deliver hundreds of channels of on-demand content and interactive services.
And “eventually” is creeping closer, as Verizon has won a series of regulatory victories in states including Texas, Florida, and Virginia. In Texas, for example, the legislature is close to giving the company a statewide franchise for its TV service, unlike the laborious town-by-town agreements cable companies have had to attain.
Not that advertisers are going to abandon mass-delivery networks. And Verizon will still sell its service in packages rather than a la carte. “Although consumers want greater choice and flexibility and want to watch where they want to and when they want do… whenever a more flexible package has been tried it hasn’t worked,” said Lindsey Gardner, executive vice president, affiliate sales and marketing for Fox Cable Networks.
