"Intelligent" television threatens to put the fading notion of mass marketing out of its misery
 

Prime Time BI

If you still doubt that business intelligence applications will ever transcend a relatively limited pool of innovative, high-flying companies and enter mainstream marketing consciousness, I bring you news: Thanks to revolutionary television programming services such as TiVo and ReplayTV, BI may become as mainstream as media buying.

Michael Lewis' fascinating article "Boom Box," in The New York Times Magazine (Aug. 13, 2000) lucidly explains why these new companies threaten not only to destroy television programming as we know it, but also to put one final, very large nail in the coffin for the all-American notion of mass marketing -- IT-enabled processes such as one-to-one marketing having already slammed the lid shut.

These companies are currently operating under the premise of enhancing the "viewer experience" with a consumer device that in essence serves as a digital VCR -- one that's easier to use than the garden-variety version, of course. (For example, these devices give viewers the ability to record their favorite programs automatically across multiple channels.) But according to Lewis, this premise is only a cover story designed to mollify the networks; several of which, incredibly enough, are TiVo and ReplayTV investors.

In reality, these visionary companies have a far more ambitious goal: to capture the viewing preferences of the 102 million members of the U.S. television viewing audience in atomic detail, creating what could arguably be the largest data warehouse in history. In that effort, both companies are in a race to build partnerships with consumer electronics and cable companies that would deliver their technologies as services to as many homes as possible. Before long, TiVo could conceivably be a standard feature in basic cable services across the country.

Customer Sashimi

Lewis does a fine job of discussing the momentous implications here. As he explains, such a service could become "the hub of the television industry.... The company would know the subtle preferences of each and every television viewer," whether it be an interest in sports or a fondness for melodrama. In theory, it would even know if you have a strong dislike for Regis Philbin, given your propensity to hit the channel button whenever his mug enters your television screen. (I have this habit myself.)

The opportunities for the creative application of viewer segmentation and clustering are obvious and attractive. Indeed, the theoretical "telewarehouse" I mentioned earlier could become the information platform for literally millions of micromarketing campaigns. For example, a beverage company might decide to deliver different marketing messages about a new drink to different groups of people during the same commercial spot; perhaps people under 18 will see the spot emphasizing taste and "coolness," whereas those in their early 30s will get the "diet" message. The concept simply lays waste to old-fashioned, broadcast- style mass marketing and blurs the already wavering line between television and Internet terminally.

Private Matters

If this idea comes to pass, the massive amounts of customer information available may dwarf that already pouring from the customer clickstream. The advertisers buying chunks of the U.S. viewing audience will need scalable, efficient tools for understanding these data points and their relationship to each other, as well as the cross-selling opportunities through other channels. Perhaps we'll see a new class of "telebusiness intelligence" features and products emerge, relegating the notoriously unreliable Nielsen and Arbitron ratings to the ash bin of history.