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Data analytics helps reality TV turn text messages into revenue

Reality television shows are using data analytics to turn anonymous text messages into living, breathing consumers ripe for an up-sell.

On any given night, millions of television viewers text votes for their favorite reality show contestants via mobile devices. Most people probably think that’s where the data trail ends. But in some cases they’d be wrong.

Telescope, a Los Angeles-based company that processes text messages for a number of reality TV shows, also helps producers analyze the mobile data in order to turn anonymous mobile phone numbers into living, breathing consumers ripe for an up-sell.

Here’s how it works. When someone texts a vote for their favorite contestant on a reality show, for example, they will often get a text message back thanking them for their vote and encouraging them to visit an associated website. There, the voter can join online communities, sign up for newsletters about the show or purchase related products, often requiring registration information including name and e-mail address.

Telescope then integrates the disparate data into custom-built databases and connects the phone number with the voter’s online registration information. The next time the person texts a vote, the producers will know that it’s Bob Smith, for example, and not just phone number 555-1234.

Now producers know who Bob voted for and what he purchased, and the show can text message or e-mail him a discount offer for other merchandise he is likely to buy -- merchandise related either to past purchases or to the reality show contestant Bob voted for.

“The whole point is to try and take people from just participating in the show [via text-message voting] to a more engaged relationship,” said Ori Nakar, Telescope’s chief technology officer, in an interview.

In addition to personal customer data analysis, Telescope also runs analytics on text-message and online data to help clients understand macro-level voting and viewing patterns, and the factors that may be influencing them.

Telescope’s clients include the wildly popular American Idol, though Nakar stressed that the company only processes and tallies text message votes for the show and does not perform analytics on the data as described above. Other Telescope clients include programs on E!, Bravo and MTV, according to the company's website.

Nakar said applying data analytics to television programming is now more important than ever for TV production companies and networks.

For years, the big three networks -- NBC, ABC and CBS -- were the only options for viewers. Today, with literally hundreds of cable channels to choose from, audience fragmentation has put added pressure on TV producers to get the most out of their dwindling viewers.

Data analytics allows producers to better understand and identify their audience members, enabling more personal and -- hopefully for producers -- more successful marketing campaigns, Nakar said.

The data Telescope collects also helps its clients make their case to potential advertisers. In the past, TV execs set advertising rates based almost exclusively on the Nielson ratings. With more detailed demographic data, they can now show advertisers, for example, that show X not only got a 3.4 Nielson rating but that 1 million people texted votes and 75% of them were males in the most valuable 25- to 34-year-old demographic.

As for Telescope, until recently the company performed the data collection, analysis and reporting with custom-applications it built in-house. But in March, the company purchased business intelligence (BI) and data analytics software from Microstrategy, which Nakar said will enable the company to take its analytic capabilities to a new level.

Instead of manually building reports, which was time-consuming and prone to human error, Telescope now automates report creation. The company is also creating interactive dashboards that its clients can use to drill into data and trends on their own, Nakar said.

While “the learning curve turned out to be steeper than we anticipated,” he said, Telescope ultimately hopes to use its new Microstrategy BI and data analytics technology to help clients slice demographic data into even finer levels.

Nakar also plans to speed up the entire analysis process. He envisions a day when Telescope can run complex analysis on reality TV voting data and have it in producers’ hands in less than a day so that they can make adjustments to the next night’s program.

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