Motorola invests in targeted advertising for digital TV

The dream of online advertisers is to be able to reach discrete audiences by targeting them with messages tailored specifically for their tastes. But today, Motorola countered that by investing in a similar service for future television.

In its continuing efforts to find a bigger place for itself in the world, Motorola announced today it had invested an undisclosed amount in INVIDI Technologies Corp., a Princeton, N.J. company that developers addressable television advertising technology for cable and satellite operators.

Addressable television advertising consists of "geo-targeting of commercial messages as well as addressability to individual TV households," according to Mitch Oscar, in his book Trials & Defibrillations: Interactive TV in the US. "Additionally, some of the technologies allow advertisers to target specific demographics or viewing behavior patterns within the pay TV operator's footprint."

INVIDI, in particular, said it uses metrics such as age, gender, and location, while at the same time stressing its commitment to privacy. So it would seem to boil down to this: an advertiser could decide to send, for example, a particular ad to all of a cable company's customers in well-to-do locations (by ZIP code, perhaps? Or more granularly?) who have a male person aged 35-49 in the household.

Another player with a huge stake in addressable advertising is OpenTV, which just last month claimed the biggest market share of all set-top boxes produced worldwide.

In a recent white paper on the subject (PDF available here), OpenTV's then-CTO Vincent Dureau wrote, "We believe that addressable advertising, where specific video ads are targeted to specific audiences will become central to advertising on digital television, possibly within the next five years. If advertising is tailored to the taste of the audience, viewers will be less inclined to tune away or skip commercials. In addition, advertisers will be ready to pay premium rates to programmers and network operators who can demonstrate increased efficiency of their advertising inventory through targeting."

A search of the US patent database today revealed seven applications filed between 2003 and 2006, by INVIDI engineers -- none of them granted yet. Those patents include "Scheduling content insertion opportunities in a broadcast network" and "Content selection based on signaling from customer premises equipment..."

The abstract for the latter patent application includes the following: "Systems and methods are presented for insertion of assets into a stream of content (e.g., audio and/or video programming). Such assets may be targeted to network users separate from the surrounding content and deliveries thereof confirmed. Among other things, these systems and methods enable a new advertising paradigm based on guaranteed delivery of targeted commercial impressions. In this regard, the systems and methods generally provide assets with broadcast network programming (e.g., via actual insertion and/or switching to an asset channel) based on actual audience observations. For example, asset providers may wish to target assets for delivery according to specific audience classifications (e.g., gender, income level, locale, age, etc.)."

What makes today's announcement particularly interesting is that it comes on the same day as the launch of Project Canoe, an effort by the six largest cable companies intended to standardize the process of placing interactive and addressable TV ads across multiple operators. That initiative was unveiled this morning in The New York Times.

That project would streamline the process of developing hardware, software, and ads without having to develop a separate system for each cable operator. Participants include Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision Systems and Bright House Networks, the first five of which are historical Motorola set-top box customers (although Cox recently lost an important STB contract to rival Cisco). The six companies are expected to invest $150 in the effort, which according to the Times would enable the cable industry to triple its advertising revenues, from $5 billion a year to $15 billion a year.

Project Canoe also "allows television viewers to use remote controls to, say, request a brochure or call up more information about a product." Like, say, through a Motorola set-top box.

Motorola and INVIDI were both contacted by BetaNews for comment, and may yet respond.

INVIDI itself is on its third round of financing, having raised $25 million in December. Other investors include Group M, the parent of media communications giant WPP, Menlo Ventures, InterWest Partners and EnerTech Capital.