By the cultural standards of today, the technology is ancient, born amid hot jazz and bootleg booze, when memories of the slaughters of the “The Great War” — now called World War I — were still fresh enough to hurt.
History, though, is often wonderfully contradictory, even contrarian, and as the internet age matures, it is becoming more difficult to imagine digital life without the benefit of television.
Well, consider the example of Samba TV, a company that pays hardware manufacturers to put its tracking software into their TV sets so that Samba can craft targeted ads based on viewing habits. The company gained a higher profile on Thursday (July 5) via an article about it in The New York Times, and that is all but certain to inject fresh energy into the ongoing debates about consumer privacy and data security.
But this is not a story about privacy. This is a look into how digital commerce and payments are using television — specifically, smart TVs — to anticipate what consumers want to buy, and how and when they intend to make purchases and do other digitally supported transactions.
That trend fits into the emerging ecosystem of contextual commerce, a phrase that refers to meeting consumers on their own terms — for instance, on social media sites that attract people with similar interests — and then offering them the chance to buy products related to what they are reading, talking and thinking about.
The software that companies such as Samba TV use can analyze the smallest, second-by-second details, including via pixels, to tell what consumers are watching. That includes not only types of programs but new show preferences, which can help determine the political leanings of viewers. Consumers must give Samba permission to track that data, but about 90 percent of consumers do so.
Such companies as Expedia, Citi and JetBlue reportedly have used Samba technology to craft personalized ads. Samba said it does not sell the data it collects but helps its clients direct relevant marketing messages to consumers based on their viewing habits. Those ads might appear on other household web-connected devices too. Samba also offers digital tags that let companies figure out who visits their websites after ads appear.
Despite its age, and the competition it faces from other technology and forms of entertainment, television still draws the crowds that marketers covet.
Men spend nearly three hours each day watching TV, while women devote 2.5 hours to that activity, according to the latest American Time Use Study from the U.S. Bureau of Labor Statistics. Those figures might be low, as data from Nielson show that U.S. consumers spend 4.4 hours a day watching television. That’s out of the 11.1 hours each day that the average consumer spends consuming media.
That does not mean all those TV hours are spent focusing intently on whatever program is on. The internet age is also an age of nonstop multitasking and short attention spans, and one study has reported that U.S. consumers spend an average of five hours each day on their mobile phones, with apps accounting for at least half of that daily mobile consumption.
Consumer use of smartphone and mobile apps also lead to more precise marketing messages, of course. But that still doesn’t mean anyone should count out TV.
Already, an estimated 45 percent of U.S. households own smart TV, and because the margins are typically slim from hardware sales, manufacturers seem likely to seek out more partnerships with data-tracking firms in an effort to produce more revenue. In fact, according to the report, Samba TV said, “our business model does subsidize a small piece of the television hardware,” though other details were not forthcoming.
Orwell famously wrote in “1984” about TVs that watch citizens, helping to keep them obedient to Big Brother. It’s a cliché these days to say that we, not the government, are Big Brother, but there is no denying that our TVs are increasingly watching us. The questions that will gain more answers in the coming few years are what this means for privacy, and how well TV watchers take to being offered products and services based on programs they’ve just watched.