Depending on age, location, income and other attributes of householders, the new system will allow Sky to target adverts.
AdSmart means that advertisers can target products more effectively to people who are likely to be interested. For example, Tesco could run a promotion that is specific to a certain region only, without other parts of the country seeing an advert irrelevant to them.
Each household has a profile of basic satellite subscriber data coupled with demographic information from Experian. Sky will load a library of adverts to the hard drive of every Sky+HD box, and the ads will appear during breaks.
"With Sky AdSmart, we want to make TV advertising work better for viewers and advertisers," Sky's managing director Andrew Griffith said.
"By enabling advertisers to better segment the TV audience, Sky AdSmart has the potential to open up TV advertising to many more brands and businesses. This helps both the brands that previously thought TV too broad a medium, as well as local advertisers who felt that TV wasn't previously accessible to them."
Concerned about privacy? Then sky customer can opt out of the service, however I don't think that will be the reason to opt out, we dislike advertising interruptions as it is!