British satellite broadcaster Sky plans to offer broadcasters the ability to serve targeted adverts to viewers in Sky+ homes, based on their personal profiles. Television advertisers probably waste at least half of their money. They just do not know which half. Targeting advertising based on viewer preferences could avoid trying to sell dog food to homes without dogs.

“We hope to have Smart TV ready by 2011,” Nick Milligan, the managing director of Sky Media told advertisers and broadcasters at a conference in London. “Over the next couple of years, we intend to build a detailed database so we can drop targeted ads into regular TV ad breaks and develop a relationship with consumers.”

Adverts will be downloaded onto Sky+ digital video recorders in advance and then seamlessly
spliced into advertising breaks based on age, sex, lifestyle preferences and viewing habits.

There are now over 4 million homes in the United Kingdom and Ireland with a Sky+ digital video recorder, a number that rose by 10% in the last quarter. Over half of new customers take the Sky+ option.

Sky already has an opt-in panel of over 30,000 Sky View homes that contribute their viewing data, providing a far more accurate picture of actual viewing than conventional audience measurement panels.

Ad insertion has been a feature of cable television in North America for many years, and is seen as an opportunity for telco television providers. Targeted advertising based on subscriber profiles and behavioural data is seen as the ultimate objective.

While satellite broadcasters have been at something of a disadvantage in this respect, the use of digital video recorders to deliver targeted adverts avoids the need to invest in complex new technology to traffic the adverts and insert them in the broadcast stream. Most of what is required is already in the box, distributed across the installed base of users.