Set-top boxes enable television advertisers to select more narrow audience segments than traditional demographic targeting.
"[Demographic targeting] is no better than statistically random when trying to hit actual consumers/potential consumers for most brands," said PrecisionDemand CEO Jon Mandel, when asked about the limitations of demo targeting. "That is why we use first party data, target real consumers and find them by going many hundreds of variables deep."
He added leveraging set-top box data forces marketers and media companies to be more granular.
"When you use age/gender and the old method of viewing measurement you are using averages that bury the opportunities and cause you to also go down rabbit holes," he said. "Especially considering that it is not just set-top box data -- it is that the viewership is done on the same basis as the customers of the product."
That message has resonated with medical insurance company Physicians Mutual Insurance Co. (PMIC), which has steadily moved its entire direct response TV (DRTV) budget to PrecisionDemand over the last year. As Mandel put it, PrecisionDemand took it from old-fashioned age and gender focused direct marketing to multi-faceted attribution targeting.
It also allowed PMIC to see how its audience targeting on TV was comparing to other online ads.
"Our traditional DRTV program has been about understanding who our prospect is for a given campaign and then choosing stations and time periods that matched up," said Kim Lesinski, PMIC's assistant VP of direct marketing. "We'd then negotiate for that remnant placements. We had some success there, but we were limited in what we could do because remnant times and rates aren't available year-round. Plus, you're only indication on whether a deal was worth making was cost-per-lead. But we wanted to move beyond that."