This is a partial transcript from "Your World with Neil Cavuto," March 25, 2005, that was edited for clarity.

NEIL CAVUTO, HOST: Well, forget some of the marketing gimmicks. If the maker of Peeps advertises on TV, my next guest has a way to make sure only folks who would actually buy Peeps would see those ads. The company's called Invidi. Its new technology promises to give advertisers more bang for their buck.

Here to explain how it all works is the company's CEO, David Downey.

So David, how would you make people clue in to the folks Jamie was trying to reach?

DAVID DOWNEY, CEO, INVIDI: Well, with the Invidi solution, we're the Holy Grail for marketers and advertisers. We have the ability to combine the power of television with direct mail and send television commercials to individual television sets based upon age, sex, income, geography and ethnicity.

CAVUTO: But how do you know who's watching?

DOWNEY: Well, we have the ability to measure the click stream data that's generated by your remote control in combination with the geographic location that you're at. And through that algorithm base that we've developed, we've learned pretty precisely who's watching, not individuals....

CAVUTO: So I could be upstairs watching one thing. My wife could be downstairs watching something else and you guys would know what that is?

DOWNEY: Well, you could actually be watching the same program upstairs and downstairs and get different commercials.

CAVUTO: What are you putting in my TV that makes you know what the heck I'm watching?

DOWNEY: It's not in your television set. It's a software application that's downloaded into your cable television receiver or your satellite receiver, and that small application categorizes you based upon the same way in which Nielsen currently aggregates information.

CAVUTO: So do you have to be an agreeable participating household?

DOWNEY: No, it's actually a very noninvasive.

CAVUTO: Because it sounds kind of Big Brother-ish.

DOWNEY: Well, no, it's very noninvasive. Frankly, when you compare it to direct mail and other things where people actually go out and buy lists of names, that know precisely who you are. It's not nearly as...

CAVUTO: But you, David, have drawn it one step further. You've come right into my living room, right?

DOWNEY: Well, we're definitely coming into your living room, but none of the information that we gather ever leaves your living room. It all stays in that set box.

CAVUTO: But the advertiser would know that if you want to do bakery products for Neil Cavuto, you can reach him in his living room and away you go, right?

DOWNEY: That's right.

CAVUTO: OK, now what is the advertiser get out of it? Well, obviously, a very segmented audience. Right?

DOWNEY: That's right. Well, currently television is bought and sold based on demographic audiences. And as John Wanamaker once said, the famous retailer, he knew that 50 percent of his advertising was being wasted. He just didn't know which half. In our world, we'll solve that problem for television.

CAVUTO: So if you're a network, cable or otherwise, what does this mean for you? Wouldn't it mean for the big guys a loss of advertisers, because they say, well, we can actually find our compartmentalized audience on this cable channel?

DOWNEY: Well, you know, in any paradigm shift, there's winners and losers. But in this particular case, the broadcast networks, which have 42 percent of the audience, currently glean $43 billion in advertising. And us guys in cable that have over 50 percent of the viewers only generate about $18 billion.

CAVUTO: That's interesting.

DOWNEY: So with our technology we're going to level that playing field, and we think it will be a revolutionary shift.

CAVUTO: How soon is this going to be reality?

DOWNEY: Well, it's happening right now. We're working with all the major cable companies and satellite firms.

CAVUTO: So satellite and cable. You're — you won't be able to dodge this?

DOWNEY: It's definitely coming to a house near you soon.

CAVUTO: All right. David Downey, thank you very much.

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