Targeted ads on television are likely in the future after the Federal Communications Commission gave the thumbs up to Next Generation TV technology in a recent vote.
Approval of the IP-based platform squeaked by in a 3-2 vote along party lines. The transmission standard, also called ATSC 3.0, will improve mobile viewing and allow for Ultra High Definition broadcasts. In a more controversial component, the technology will also permit broadcasters to combine online data with TV viewing information for ad-targeting purposes.
Where advertisers previously based television commercials on broad demographics (such as males ages 18 to 49), Next Gen TV can combine data from set-top boxes with online browsing history and the viewing habits of consumers on phones, tablets and other smart devices for more targeted ads.
“Next Gen TV has the potential to bring a wide range of benefits to American consumers,” FCC Chair Ajit Pai said in a statement about the Order approving the technology. “Through expanded service offerings and new features, Next Gen TV should enhance the free, over-the-air television service that many Americans rely on, and make it a stronger competitor to pay-TV services.”
Consumer advocates opposed the technology, arguing that it will chip away at consumer privacy and be costly, and will require consumers to purchase new TV sets.
An executive at Sinclair Broadcast Group, which filed a petition seeking approval of Next Gen TV, claimed that the technology will enable the company to compile “perfect data” about consumers. “We’ll know where you are, who you are, and what you’re doing—just like you do now, just like everybody does now, the Internet does, or Google, or . . . Facebook,” according to a Bloomberg report. “We will have perfect data all the time.”
The Order set up a five-year period during which Next Gen TV broadcasters are required to simulcast contents using the new technology as well as the current digital standards. Once the five years are up, consumers may be forced to buy new TVs if broadcasters only air Next Gen TV signals.
This sunset of the simulcast requirement was one reason for FCC Commissioner Mignon L. Clyburn’s dissenting vote. “[T]his Order is not ready for primetime,” she wrote in a dissenting statement. “It will do more for existing broadcasters than for the future of the industry and it will do much more for those companies’ bottom line than for the nation’s unsuspecting viewers.”
Fellow dissenting Commissioner Jessica Rosenworcel used even harsher words, calling the Order “a tax on every household with a television.” The FCC’s approval of Next Gen TV “is irresponsibly imprecise and cavalier in its disregard for the expenses it imposes on consumers,” she wrote. “I believe the next transition should leave no viewer worse off, and leave all of us better off.”
Why it matters: Characterizing a vote in favor of Next Gen TV as “a vote for innovation,” Chair Pai criticized the “naysayers” who chose “fear and opportunism over freedom and opportunity.” The ability to provide more tailored ads to consumers during television broadcasts should prove beneficial for advertisers.