There’s been quite a bit written on how consumers are interacting with TiVo, but there hasn’t been a lot said about how businesses are beginning to use TiVo. Over the past few years, it’s been no secret that TiVo has been beefing up their audience research capabilities and while having access to second by second information is a pretty cool party trick, it’s useless if a business can’t figure out a way to extract profits out of that information. That was why I was pleased to see a blog post by Secret Enemy Hideout discussing a company named Simulmedia whose using TiVo’s data to create an arbitrage opportunity.
“With a set of millions of users, they identify viewing patterns and can predict with certainty how receptive you might be to one television program given that you voluntarily watch some other one. What’s interesting is their business model. Instead of selling the clean data back to the networks like we’d expect, they go back and ask, for example, “How many viewers would you like us to deliver to Mad Men?” Then they take the network’s own marketing assets, like a 15-second trailer, buy commercial slots on other networks, and target the viewers of specific shows who they know will be receptive to Mad Men. In turn, they get paid for the uptick they promised.”
Secret Enemy Hideout calls Simulmedia a new media bounty hunter and as DVR data matures, I expect that the media bounty hunter industry will be a burgeoning one. By having a more intimate understanding of an audience, many different types of advertisers will become increasingly more efficient at extracting value from their ad spend. With billions of dollars a year being spent on television ads, the stakes are huge and while TiVo may not end up being a pariah to the advertisers that can feast off this info, these sorts of bounty hunters certainly won’t endear them to studios. From the studio’s perspective, it’s bad enough that their technology is having a huge disruptive impact on the 30 second commercial, but now TiVo is teaching the studio’s best customers how to get the same exposure by spending less money. As TiVo makes it more and more efficient for marketers, it will take money that is being wasted on the studios and transfer it into the pockets of the companies advertising. Ultimately, this means that ads end up being a lot more relevant to the consumer, but it will also represent a new challenge for the studios to wrestle with, amidst the broader changes brought on by digitization.
#1 by Dave Morgan on October 29, 2009 - 2:23 am
Dave Morgan from Simulmedia here. Just wanted to clarify something. Simulmedia is licensing aggregated, anonymous set-top box data to help program marketers driven find viewers that might like their shows. However, while we are currently working with several different television system operators, including Charter and Direct TV, we are not licensing or using Tivo data at this time. The confusion came from earlier posts on other blogs referencing that we were using data from sources “like” Tivo.
#2 by Phoebe on October 29, 2009 - 10:44 am
Tivo’s data contains such valuable insights into customer preferences, it seems like they could gain a key role in advertising, at least for TV if not beyond.