At the coming CES in Las Vegas, media data provider Gracenote is going to demonstrate a proof-of-concept of technology that puts ad-swapping power right into the TV set. Gracenote is using video recognition technology to identify ad breaks, and will be able to insert ads based on the demographic of a viewer, as well as knowledge about what kind of shows he or she has watched in the past.

Take a look at Gracenote President Stephen White demonstrating the technology in the video below:

Gracenote started to get into the video recognition game when it acquired video recognition specialist Bulldog United earlier this year. The company has been working on expanding its role in the content recognition space in recent months, venturing into the space of TV second-screen applications and powering audio recognition in apps like Path and the just-released Rhapsody SongMatch app.

With ad personalization, Gracenote would be taking on a problem that has been a tough nut to crack for the industry in the past. More than four years ago, major U.S. cable companies came together to personalize advertising with an initiative called Project Canoe. Those efforts went nowhere, and Canoe all but abandoned its efforts (and laid off 120 employees) earlier this year.

White is the first one to admit that it won’t be easy to change advertising. Not only are there technical challenges, but handing the key to the ad kingdom over to TV makers could also upset broadcasters and service providers, which is why Gracenote hopes to find solutions that benefit everyone. The company wants to do some trials in 2013, and hopes that TV sets with ad swapping capabilities will reach the market in 2013. White didn’t want to tell me who is lined up to try out this technology – but given the fact that Gracenote is owned by Sony, I wouldn’t be too surprised to see some of it find its way into Sony TV sets.

If anything, this new effort demonstrates a new role for CE manufacturers. TV makers used to provide a more or less dumb screen that was dependent on content from service providers. With a shift towards smart TVs and over-the-top services, they’re feeling momentum move towards them. Some have even tried to broker their own content deals. It’s only logical that advertising would be the next step.

Image courtesy of Flickr user gildas_f.

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