2012: the end is nigh for faith-based marketing

The XBox Kinect is providing a new way for firms to interact with consumers

TV advertising as we know it will soon cease to exist. Instead of streaming out the same ads to whoever happens to be watching, soon firms will be able to tailor their advertising to each viewer. It's been coming for a while, as television and the internet converge, but no one has quite managed to bridge the gap. Now, with the emergence of smart TVs, interactive ads and intelligent apps, things are going to change.

The problem with TV advertising is that it fails to engage with the majority of viewers. Google's search engine marketing platform has become the driving force behind the company's $10bn annual revenues, and the main reason is that it presents people with what they actually want. It is also accountable down to the last penny – something that TV and radio have never been. If you gain money through Google advertising, you know about it; with the old media, you're just guessing. Avinash Kaushik, a well-known internet business commentator, has called advertising via the old-media channels "faith-based marketing": you spend your budget on adverts, and then pray that they drive business to your door – but you have no way of knowing whether they actually do. But that is about to change, as new technologies blur the line between television and the internet.

XBox NuAds is one such innovation. When streaming TV via your Xbox Kinect, Microsoft are able to provide advertising which the user can interact with, via voice and gesture controls. With a swipe of your hand you can enter competitions, or share content to Twitter with a voice command. This gives advertisers a direct line of communication with their target audience, and gives users the chance to engage with brands if they want to.

Dual-screen apps, which recognise what you're watching on TV and provide related content for your tablet or smartphone, also offer publishers a new dimension of interaction with viewers. Disney use this technology to provide children with iPad games which match the movie they're watching. In an advertising context, apps could listen to what advert you're watching on TV, and provide offers or vouchers if you navigate to the site within a certain period of time. This would provide a previously unavailable link for advertisers between the money they spend on TV ads and actual revenue.

2011 has also seen smart TVs come to the fore; already loaded with applications such as LoveFilm and BBC iPlayer, they too are bringing the web and TV closer together. While they don't yet come with browsers as standard, it will not be long before they do, and the two strands of home entertainment will be merged. When this happens, advertising agencies will be able to serve you ads based on your viewing, social and browsing habits. It may sound like something out of Minority Report, but I've seen enough perfume ads for one lifetime already. If there was a way for the ads I have to watch on TV to be personalised to me, then I would happily opt in.

Google have also been pushing into this space with Google TV. It hasn't made an impact in the UK yet, but Eric Schmidt, chairman of Google, said at a conference in Paris this month that by halfway through 2012 "most" new TVs will have it. Google TV does have a browser built in, and also gives access to a wide range of Android apps from their marketplace. And of course there is Apple, notoriously late to market with their iPhone, who are also now rumoured to also be developing a TV in addition to their Apple TV product.

There is a race on to dominate this emerging new channel, with a lot of players aiming to avoid becoming the new Beta-Max. No matter who wins, advertising will play a huge part in their success or failure. But it won't be advertising as we know it. Broad-spectrum, faith-based marketing is out; personalised data-driven marketing is in.