Fox debuted its new app FN Genius last month during the Teen Choice Awards, and the trivia game, modeled on the very successful HQ, appears to be a genius idea.
That’s because it gives Fox a brand new way to establish a one-to-one relationship with viewers, who need to supply a phone number during sign-up so the app can send them alerts when there’s a new game underway. That right there is what they call first-party data, and it’s something that entertainment companies in general, and TV networks in particular, sorely lack.
TV networks don’t have direct relationships with their end users. People watch Fox (the broadcast network) either over the air or via a pay-TV service. In the former case, Fox has no way of knowing who has an antenna up to pull in its broadcasts; in the latter, only the pay-TV provider (e.g., a cable company) knows who is watching, and it’s not sharing that data with Fox.
Why First-Party Data Matters
Slowly but surely, the television industry is creeping toward an addressable advertising model. We may never see a fully addressable ad ecosystem, but the number of addressable spots is going to rise pretty rapidly over the next three to five years.
Much of that growth will be directly attributable to the growth of vMVPDs (virtual multichannel video platform distributors — companies like Sling, DirecTV Now and Hulu Live TV) and OTT apps like CBS All Access. Millions of people will be watching TV via these digital-only transmissions (something like 25% to 50% of the total audience by 2023 seems to be the general consensus), and unlike traditional cable TV, the digital delivery systems can easily accommodate addressable delivery.
First-party data is data that companies have about their customers. So if, say, you’re United Airlines, it’s the data you have about all those MileagePlus members, which generally includes their email addresses, phone numbers and credit card numbers.
United can then take that first-party data, strip it of any PII (Personally Identifiable Information) and combine it with third-party data from sources like Experian (which tracks credit card purchases), location data from apps, and other data (motor vehicles records, zip codes) to create a target for its advertising.
(NB: The use of such data, even stripped of PII, is not without controversy. Privacy advocates argue that it’s often fairly easy to backtrack and figure out who exactly the anonymous target is. If “User 57138B3” is a 35-to-49-year-old married female police officer in zip code 10101 who owns a Honda Civic, and there is only one woman in zip code 10101 who fits that description, it’s pretty easy to figure out who she is.)
To return to our United example, however, Fox can now say to United, “You can take your first-party data and match it to our first-party data and see how many United MileagePlus members watch specific Fox TV shows.” That helps with ad sales, and if the number of FN Genius players who are United MileagePlus members (or potential members) is relatively high, United may even be tempted to become an FN Genius sponsor.
More importantly, it helps Fox and other TV networks in their attempts to fight back against a duopoly: Both Google and Facebook have a wealth of first-party data given to them by their users, and the existence of that first-party data has helped them corner the digital ad market. TV has multiple other advantages (lack of fraud, high-quality content), but the duopoly’s ability to target and segment based on first party is huge.
Segmentation on TV has come a long way, as my recent Forbes coverage of moves made by “TV tech” companies like Inscape, LiveRamp, Adobe and iSpot as well as Beachfront Media and TruOptik shows. The more first-party data a network can gather, the easier it is to create and validate those segments and the more powerful that data becomes, particularly at at time when addressable TV advertising is on the rise.