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Set-top box data informs media buys

Set-Top Box Data Is Changing the Game

August 17th, 2016   ||    by Callie Wheeler

The TV industry is changing, as set-top box data gives networks and agencies access to data they haven’t had in the past. Like countless other industries—retail, energy, and finance, to name a few—television is taking advantage of data to equip partners with the ingredients for data-driven purchases and strategies.

Where retail giants are using data to create custom online shopping experiences, the TV industry is using this new trove to drive smarter ad purchasing and targeting.

How it Works

Multichannel video-programming distributors (MVPD), like DirecTV or Time Warner, collect data about their customers through their set-top boxes. These boxes are tied to an address, meaning they provide greater granularity, allowing advertisers to use data matches to tie viewers to purchase history.

MVPDs sell this set-top box data to television networks and ad agencies, which then use them to inform their clients’ media buys, supplement Nielsen data, and more.

Raising the Bar

Set-top boxes are linked with households and exist in much greater volume than Nielsen households. Media account services director at KSM, Katie Stewart, pointed out that set-top box ownership reached 64 perfect this year. Additionally, the wealth of data available to advertisers is significant when compared with past options.

By analyzing purchasing data, demographic information, and viewing history, networks and agencies work to match households’ spending and viewing habits. For example, families who purchased dish soap and owned SUVs might be more likely to watch the nightly network news, giving advertisers a better idea about which television shows are a match for their audiences.

Challenges and Restrictions

Ultimately advertisers are buying entire shows’ audiences, rather than households, so the targeted aspect of this kind of buying is still limited. And as AdExchanger points out, there are other issues with accuracy, too. Each data set has its own biases, depending on the MVPD’s customers’ geographic location, socioeconomic position, age, and more. The data reflects entire households, rather than individual viewing behavior. Also set-top boxes have technological limitations, like old hardware, and no clear indication of when viewers stop watching.

Another hurdle in effectively utilizing set-top box data is the difficulty advertisers encounter when trying to integrate it with other sources. Because the data is coming from different vendors, it may be siloed or even duplicated, prompting some to call for industry data standards.

Though there are challenges with today’s set-top box data, it’s still a step in the right direction. Data-driven purchasing creates a superior viewing experiences for viewers, better ROI for advertisers, and more value for networks. With increased accuracy and standardized data formats, advertisers and networks alike will see even more benefits.

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