UCL Professor finds “Outdated TV advertising is 90% too expensive”

TV adverts must be targeted to individual households, to combat viewers skipping the ad breaks, new research from UCL School of Management reveals.

Television advertisers could save costs and increase their response rate by better understanding viewer behaviour and providing smarter targeted television advertising.

In their research, Professor Yiting Deng from UCL School of Management and Carl F. Mela, a professor at Fuqua School of Business, Duke University, found that it’s possible to lower advertising costs per target view by over 90%.

They used data from set-top boxes on what people view, and scanner data on the viewers’ purchase history, to better understand viewer behaviour and propose effective ways for advertisers to improve their targeting profitability.

“The digital targeting of advertising on television is transforming. Digital TV is allowing the measurement of household TV viewing, to better forecast household advertising exposure, and set-top boxes offer precise targeting of households,” says Deng. “With the growth of catch up TV and the ability to skip the adverts, broadcasters now have to change their ways.”