Big Data Aims to Prove Its Worth in Cable Ad Sales

One of the reasons that Barack Obama was able to win two terms as president was the cutting edge way in which his organization collected and used data.The emphasis on advanced data techniques was more pronounced during the 2012 campaign than it was four years earlier. Obama for America, observers said, more accurately targeted likely voters with highly customized messages - and did it for less money than his opponent.Last week, FourthWall Media hoped to tap into some of that intelligence by signing a deal with BlueLabs, which was formed by leadership from the Obama for American analytics team. Under the agreement, BlueLabs will use data collected from set-top boxes by FourthWall to help perfect advertising decisions by its clients, who generally are democratic candidates.The deal is an illustration of the potential benefits of the marriage of cable operations and "big data," which is the term that loosely covers the massive increases in the amount of information available and the parallel rise of the tools capable of processing and utilizing that data.The cable industry is sitting on a data gold mine. But it is a gold mine in which not all operators are yet digging. "The ironic thing is that with few exceptions, not a lot of data collection [is] going on," said Bill Feininger, the general manager of massive data for FourthWall. "The biggest players are just testing or doing nothing or have systems that are inaccurate. It may be that the biggest cable companies have treasure troves of data that they are telling nobody about, but I doubt that."This is a situation that Feininger expects to change. He suggests that using the intelligence generated from setting cutting-edge business analytics loose on the massive amounts of data to which operators have access will enable targeting ad buys with razor sharp specificity. This, he suggests, will be a beachhead for big data in the cable industry. Big data, he suggests, will be validated to cable decision makers through ad sales. "There is no question that it will be the first place," he said. "You can save money while reaching your target audience much better."Clearly, there are many other areas ways in which cable operators can use big data, such as boiling through cascades of alarms to discover precisely where a problem is, using GPS data to better manage field forces, and utilizing tools that assess network usage and operational data to determine precisely when to add more bandwidth or take other proactive steps.But the broad area of advertising is clearly one in which big data can showcase its attributes and generate the immediate benefits that will impress C-level executives. The bottom line is that combining big data tools with what operators have on hand has the potential to qualitatively change how ad sales are handled, said George Shababb, the president of Kantar Media Audiences North America.In the past, a big national advertiser would favor ad spending on national networks over more limited local or regional avails offered by cable operators. However, the ability of the new engines to marry disparate data sources to get an accurate and very specific bead on who is watching can suddenly make cable buys much more attractive for these national brands. The focus simply shifts from quantity to quality.Due to the massive number-crunching capabilities, operators suddenly may be in the driver's seat. "Where they are looking is to be able to target their advertising," Shababb said. "Instead of buying ads on [just an] age/sex demographic basis, they are developing the capability to target ads based on known buyers of products and services," he said. "Big data from Time Warner or Comcast or Charter is being integrated with third-party databases."The other huge factor that will put advertising at the forefront of big data is the advent of second and third screens. Operators need to join the second and third screen revolution just to survive. Big data will take what may be a defensive strategy - the need to support second and third screens as a way to keep pace with competitors - and make it into a great source of revenue.The complexity of advertising will rise significantly as operators seek to duplicate the sophistication of the Obama campaign. Cathy Hetzel, the corporate president for Rentrak, an organization that helps operators understand and use the data they collect, feels that the industry is making strides as this brave new world approaches. "I believe the changes in the advertising model and in the consumer behavior - people are watching on different devices - is driving operators to recognize the importance of this data," she said. "This drives them to collect it and to work with their partners to understand it."Carl Weinschenk is the Senior Editor of Broadband Technology Report. Contact him at [email protected].