Hyper-Targeting and Why TV will Lose Smart Advertisers

Orbitz Chief Marketing Officer Randy Wagner says [in this week’s BusinessWeek article – "Cable’s Big Bet on Hyper-Targeting] reaching consumers with ads they won’t skip is a priority.  She likens the goal to Amazon.com’s strategy of recommending products based on past purchases.  "It’s so relevant, it feels like a service instead of selling."

I had the chance to meet with Randy several weeks ago to speak about the marketing challenges facing the Orbitz brand, as well as the travel industry as a whole.  The interesting insight from those meetings which I can definitely attest to first hand, having spent the past week on the road … is that the travel industry has weaned customers away from the idea of expecting service more than any other industry.  If a plane lands on time, and the staff isn’t rude to us, we’re thrilled.  In this environment, there is an erosion of expectation coupled with the erosion of trust written about often by media and advertising skeptics.  How do we rise above this?  How does the Internet offer a way forward unlike TV, or radio, or print, or any other medium?

I think the difference lies in a passive experience versus an active one.  Targeting on television, as written about by David  Kiley in BusinessWeek (available online to subscribers only) is inherently flawed, in my view.  It  attempts to measure what people are watching and then group attitudes based on shows.  The problems with this method are numerous:

• Multiple people use the same television
• People often "watch what’s on" – not indicating a preference for that show or even a belonging to the target audience group, but rather a laziness in changing the channel … not a great metric to target with
• Televisions are often running when no one is watching

Contrast this with the Internet and a similar targeting exercise in this medium.  The potential is vastly different:

• Users are profiled based first on what they tell you – from having registered
• Sophisticated profiles can be created based on what they do, not just who they might be
• New options can be presented real time to interact with this audience
• You are guaranteed that someone is at the other end of the line, because they are interacting

For any of our clients trying to avoid the "ad skipping generation"  – the fact that the Internet is the medium to focus on seems to be the clear conclusion.  At least, until Cable can come up with a "hyper-targeting" technology that can come remotely close to what we already have on the Internet.