DirecTV and Dish Network customers may notice something a little different this election season: Your television ads know who you are.
The technology, known as "addressable advertising," is the latest front in a growing battle to reach voters.
Low-tech targeted advertising has long been an essential part of politics; that is, more or less, what direct mail to the home and door-to-door canvassing are. But the push in recent years among both Republicans and Democrats, particularly in the wake of the 2012 presidential campaign, has been toward harnessing data analytics to tap into increasingly sophisticated voter records databases and deliver customized online ads to would-be supporters.
Now that's moving into, perhaps, the last part of American political life to be untouched by the data revolution: your television.
"Audience-based decision making is the future of running a campaign," said Zac Moffatt, digital director of the Romney 2012 campaign. "It has to be. Not embracing technology is embracing inefficiency."
How do the ads work? The television providers will take over a customer's digital video recorder, or DVR, when it's not in use — likely in the middle of the night. The targeted ads are downloaded. When a cue is sent by an advertiser of the perfect moment to run, one of those ads are picked off the box and run on the television screen, appearing just like any ol' television commercial. "The box will reach directly into its cache and play it off the hard drive and then go directly back into programming," said Warren Schlichting, senior vice president of Dish media sales.
"It doesn't matter what you're watching," explains Michael Palmer, president of i360, the conservative-learning firm that is part of the program. The ad waits until the television is being watched and inserts itself into an open ad slot.
That means that if a viewer records an episode of "Top Chef" and watches before the election, a political ad may appear. But when that same episode is rewatched the day after the election, the ad will have disappeared, said Schlichting.
DirecTV and Dish Network established a partnership, known as D2, this summer. On the Democratic side, in addition to the Washington, D.C.-based TargetSmart, which was founded in 2006 by veterans of progressive politics, D2 has partnered with a local analytics shop called Clarity Campaign Labs, which operates the Democratic National Committee's voter file.
On the Republican side, D2 has partnered with i360, an Alexandria, Va., data warehouse firm that launched in 2009 and that has closed ties with Freedom Partners, a chamber of commerce-style group connected to Charles G. and David H. Koch, the wealthy conservative funders and organizers.*
"We're not buying television shows anymore. We're buying lists of people. We don't really care about what program you're watching," said Andrew Bleeker, president of Bully Pulpit Interactive and who ran online marketing for the 2008 and 2012 Obama campaigns. "This is one of the few things where political is really driving corporate in a really interesting way."
One reason? There's a great deal of money and power at stake.
Moffatt, co-founder of Targeted Victory, which does what it calls "audience-based television buying," points to a recent contested congressional race in Florida where millions were spent on cable and broadcast television, while only 16 percent of the media market fell within the district.
"Television bought more efficiently frees up resources for everything else," said Moffatt. " In fact, narrowing the possible universe of supporters drives down costs and minimizes time spent on un-persuadable voters, which is particularly critical in campaigns' waning days, when resources are often in short supply."
Given their limited reach, DirecTV and Dish represent mostly a testing ground, said Bleeker. But their work, he says, could provide a nudge to the large national cable companies that may be reluctant to adopt this approach to selling their advertising inventory. (Cablevision offers addressable advertising in the New York area.) The cable industry tried doing targeted ads, ones capable of responding to user interaction, a few years ago with an industry-wide effort called Project Canoe. But it failed in 2012, in part because set-top boxes at the time weren't up to the task.
This time, a cache of voter data has been collected on both sides of the aisle in recent years, coupled with advances in technology, that could make the effort potentially successful.
The companies admit that the ads could get, well, creepy. An ad could pop up in the middle of a television show asking why you haven't signed up to volunteer for your local senator, even though you've expressed support for him or her in the past. Or, there could be an ad on your birthday that reads, "Happy Birthday, Jim. How about celebrating by giving Friends of the Earth $25, like you did last year?"
"The question is always how far you're willing to push the line," said Carol Davidsen, who handled ad targeting for the 2012 Obama campaign. Campaigns could also use the technology to test different versions of an ad, then conduct polling to see which version had more of an effect, she said. "All the data is there."
But in addition to being invasive, such narrow tailoring is expensive and impractical.
What is more likely, say vendors, are ads that rely on broad characteristics to slice and dice a viewing audience into segments: voters undecided about Obamacare, for example, but whose past record suggests can be convinced to strongly support a candidate -- and are likely to vote. That gives political marketers a powerful ability to shape their messages for all types of elections -- from presidential campaigns to mayoral races.
Addressable ads, though, are causing a stir in the world of digital politics not simply for what they might be able to do, but for what they represent in the ongoing arms race between Democrats or Republicans on who is winning at tech. (Worth noting: None of the political firms involved -- nor D2, the California-based DirecTV and the Colorado-based Dish Network -- existed 10 years ago.)
The D2 partnership with the political firms on the right and left is a way of bringing the sides together without putting down their weapons. "Nobody wants to have a shared vendor," says David Radloff, co-founder of Clarity Campaign Labs, one of the Democratic firms partnering with D2. "It's not really possible in this space."
Campaigns and advocacy groups must get approval from D2's political partner firms to use its targeting features. The groups will not approve the ad's content, but will be looking at whether there is rough ideological alignment: "Democratic and progressive," in the words of Clarity Campaign Labs and "right of center," according to i360. There's a fee for using the data that both sides describe as "small."
Democrats are extracting a bit of glee from the fact that Dish Network and DirecTV opted to partner with the Koch-tied i360 rather than a firm as closely aligned with the national party.
But i360's president Michael Palmer is diplomatic. His company, he says, "has developed substantial data and technical capacity, which made integration [with D2] very easy and efficient."
The RNC did not return a request for comment.
Addressabilty, says Bleeker, who ran online marketing for the 2008 and 2012 Obama campaigns, "is where all media is going to be in the future. And the shift is happening shockingly fast."
*Update: This paragraph has been changed to clarify the relationships among D2, i360, and Freedom Partners.