By Patience Haggin
Three of the nation's largest pay-TV companies are taking joint ownership of a platform designed to make it easier for brands to harness data to serve targeted ads to people watching cable TV, a move that comes as cost-pressured ad buyers are increasingly turning to targeted advertising.
Comcast Corp. is spinning off its Blockgraph LLC unit and selling two-thirds of it to Charter Communications Inc. and ViacomCBS Inc. in an effort to give greater scale to ad buyers relying on the platform. Each company will own one-third of Blockgraph as a result of the deal, which the three partners announced Friday. Financial terms weren't disclosed.
Targeted advertising -- serving specific ads to specific viewers based on their interests, demographics and consumption habits -- has been widespread on websites and online-video services for years, but is still in its infancy when it comes to traditional TV, where advertisers have fewer opportunities to gather information about viewers consuming TV from a living-room set-top box than they would from a smartphone or a computer.
Blockgraph acts as a service that helps brands and ad-inventory sellers match data sets without sharing too much personal data on the viewers, the company says. For instance, if a car maker buys a data set of people in the market for a car, it could use Blockgraph's technology to match that list up with cable subscribers based on their home address, Blockgraph Chief Executive Jason Manningham said. The car company could use this data either to learn which programs and time of day draw more viewers from their desired audience, or to buy ads targeted only at households on the in-market list.
"For the ad buyer, it's really about scale and simplicity," Mr. Manningham said. As a joint venture, Blockgraph provides "a massive scale of inventory that can now be unlocked."
Privacy restrictions have served as an obstacle to the growth of targeted TV advertising because data matches often rely on personally-identifying data such as viewers' home address.
Comcast and Charter are the country's two largest cable companies, accounting for nearly half of U.S. TV and broadband households, and ViacomCBS is one of the largest owners of cable and broadcast channels.
The joint venture is launching at a precarious moment in the TV ad market, when the coronavirus pandemic has many brands cutting their marketing budgets and thinking more strategically about ad placements. The pandemic has prompted marketers to walk back their planned TV ad-spending commitments and think more strategically about advertising expenditures.
Write to Patience Haggin at firstname.lastname@example.org