[W Forum] Customized TV Advertising

‘Money follows eyeballs’ is one of the golden rules in the advertising industry, which literally means that money chases eyeballs. This principle well explains the phenomenon in recent years where, as the media environment has been reorganized around digital platforms, online advertising revenues such as mobile have surpassed those of traditional media worldwide. Advertising exposure on media frequently used by many people increases the chance of gaining attention. This is why mobile advertising is effective and growing as mobile usage increases. However, since advertising targets specific consumers, it requires their interest, not just everyone’s.

We, who can process only a limited amount of information, experience information overload in an environment overflowing with information and stimuli. Since we cannot process all information, we must choose which information to pay attention to. Advertising, which needs to capture consumer attention, is a representative industry based on the attention economy. So, what kind of advertisements do we pay attention to?

We pay attention to advertisements that are relevant and interesting to us. Consumers who have been interested in home training will pay attention to ads for equipment needed for home training, while consumers considering purchasing a car will focus on information such as new car promotions. Generally, consumers actively seek content or information but tend to avoid advertisements, so it is important to deliver ads that consumers believe provide relevant and useful information. Advertisements that deliver appropriate messages reflecting individual consumers’ characteristics, needs, interests, and preferences are called ‘personalized ads.’

Effective personalized advertising is based on delivering ads to target consumers using accurate consumer information. It has grown mainly in online media, where it is relatively easy to identify consumer demographic characteristics, lifestyles, interests, and purchase records and deliver ads to individual consumers. From the advertiser’s perspective, who operates ads with a limited budget, online advertising that enables efficient personalized ads is inevitably attractive.

However, now even traditional mass media, which typically targets an unspecified large audience, such as TV, can offer personalized advertising. Since last month, the three IPTV companies have been broadcasting addressable advertising on MBC. Addressable advertising is personalized advertising that delivers different ads to individual households based on information collected through set-top boxes, such as viewing history, reflecting their interests. In other words, even if viewers watch the same program on the same channel at the same time, they see different ads according to their interests. Although it is still in the experimental stage and requires verification of effectiveness, it is significant as an attempt for TV advertising, including terrestrial broadcasting, to increase efficiency and attract new advertisers through data utilization in a digital environment. Additionally, it holds great promise as a foundation for implementing advanced personalized advertising that spans multiple media by combining with mobile.

Of course, there are concerns. Consumers who have been exposed to excessive personalized advertising in the online environment show resistance and concerns about indiscriminate collection and use of personal information. However, this is a transitional phenomenon, and the value of personalized advertising itself for advertisers and consumers should not be underestimated. I hope personalized TV advertising grows in a desirable direction that satisfies consumers, advertisers, and media alike.

Choi Se-jung, Professor, Department of Media and Graduate School, Korea University