How Xbox One Beat Cable to the Punch and Will Change Political Advertising Forever.

The new generation of Kinect technology in Xbox One can distinguish up to six voices in a room, respond to voice commands, read skeletal movement, muscle force, whether people are looking at or away from the TV and even their heart rates,[ corporate VP-marketing and strategy for Microsoft Yusuf] Mehdi said. The latter happens as the camera detects slight changes in skin tone related to dilation of a blood vessel in the eyeball that responds to heart rate, Mr. Mehdi said.

                                                                                                                Advertising Age

                                                                                                                10/5/2013                           

Seven years ago, I was invited to address the executives of one of the nation’s largest cable companies.  I challenged them to abandon their focus on competing with broadcast, and to exploit their natural advantage – set-box targeting.  At the time, they were drilling yet another dry hole in the frozen tundra of cluster group marketing, the erroneous notion that people who live near one another think alike.  Oh sure, there may be more Republicans than Democrats, or more liberals than conservatives in a given geographic pocket, but that’s descriptive, not prescriptive information.  Targeting based on such assumptions is highly dangerous in a political campaign, where voter behavior is as likely to be influenced by a negative perception as a positive one.   Show the wrong ad to the wrong people and it’s not just a waste.  You actually lose votes.  Elections are a zero sum game.  Those you alienate matter, because, in politics, 49% market share is called losing.

Let me put it another way.  Which mailing would have the greater impact, sending a National Right to Life endorsement of a candidate to a list of pro-life voters, or inadvertently sending that same group of voters a NARAL endorsement of the opponent?   The point of all this is that we need to know who we are talking to, not just the neighborhood they live in.  Cable had the technology to set-box target years ago, but sat on their hands. Through set-box targeting, I could reach only the voters I needed to reach with my candidate’s message, and skip the other households.  In fact, let me match the set boxes to the ID’d voter file, and I’d gladly pay four or five times the going rate to advertise only on the screens of undecided voters.  Cable companies would be free to sell those surrendered ad slots to another advertiser.  Win, win, win.

Imagine if voters who had made up their minds didn’t have to watch the barrage of negative ads in the final weeks of a campaign?  Why should those who have submitted absentee ballots have to continue watching political ads?  It’s a waste of ad space, campaign dollars and voters’ time.  We routinely winnow down our mail targets, why not our television targets?  The promise, of course, is great.  Not only do political advertisers want to display ads to targeted groups of voters, commercial advertisers also would pay far more to advertise to more select audiences.

I suggested this model would result one day in a consumer walking into their den, speaking to their set-box, and having the algorithms take it from there.  Advertisers would pay many times the going rate if they knew precisely whom they were talking to.  The beauty of the system is that it could have been 100% opt-in, with viewers sharing consumer data in return for lower cable charges.  I suspect, for many consumers, they might actually be paid to watch, instead of the other way around. Enter Microsoft’s Xbox One, which will fly off shelves, starting this Friday, and literally put a data collection bot in your living room.

Creepy?  You bet, but it doesn’t have to be that way. It’s a triumph of the free market when I get compensated for letting advertisers talk to me.  It’s my choice, and I can pay for content with a check, or by watching ads.  That’s just a variation on the pay-for-ad-free option on services like Pandora.  But when a bot is watching my every move—literally—and measuring me biometrically to assess ad resonance, well, like I said, creepy.

This is not, nor has it ever been, an all or nothing proposition.  Genuine opt-in puts consumers in charge, but the model needs to be compensatory, while protecting the free speech commons.  Revenue sharing is likely the future of commercial advertising, but political speech must be judged by a different standard.  Why?  Because the right to free political speech means nothing if it does not include the right to be heard.  So yes, we carve out an electronic “public square” where we occasionally have to listen to ideas we don’t agree with.  That’s the price of democracy.  But if I’m going to have to watch inane creativity-free advertising, I should get paid for it.  Create that kind of marketplace, and ads will get better, we’ll see more of what we want, station revenue will increase and advertisers won’t be paying to talk to non-prospects.

I know.  It makes too much sense.

Photo via Flickr Creative Commons: “Spy Camera Spider” by Kai Henry. (CC BY 2.0)