The Rise of Targeted Advertising Is Leading to the Fall of ‘Adults 18-49’

Targeted advertising is changing the TV industry

On July 7, 1936, from a transmitter on top of the Empire State Building, the first television broadcast was presented to a group of licensees on the 62nd floor of the NBC studios in the RCA Building. While technicians basked in the success of their venture, I can imagine advertisers were asking, “but what’s the reach and frequency?”

And thus began a long-running, mutual relationship between art and commerce in the TV industry.

A mutual relationship between advertiser and broadcaster

Broadcasters wasted no time in answering advertisers’ request for data on reach and frequency. What began as general measurement of viewing quickly morphed into demographic data by the mid-1950s. The ability to target a specific age-gender during the postwar, baby boom era must have been very enticing. Going beyond the limitations of radio and print advertising, with video to accompany an advertising message, opened limitless possibilities.

Advertisers embraced demographic data and television producers welcomed the advertising community. In some cases networks created product in conjunction with a sponsor. Take for example the Texaco Star Theatre, The Colgate Comedy Hour, and Kraft Television Theatre. Even as recently as 2009, P&G was producing two soap operas, Guiding Light and As the World Turns.

A new age of TV advertising

As television viewing fragmentation continues, the time has come for a new view on advertising. The diversity in this country, even the multiplicity within a single zip code, has reached new levels. Demographic and geographic divisions are no longer sufficient metrics for today’s coordinated, cross-media advertising campaigns.

For decades, advertisers have clamored for more targeting options. The industry has finally answered their call.

Let’s be honest, does the 47-year-old orthopedic surgeon living in Hillsborough, California have anything in common with the 19-year-old Starbucks barista taking two night courses at Mid-Michigan Community College in Harrison, Michigan? Probably not. I doubt you would find any similarity in the contents of their refrigerator, closet or bathroom cabinet. Yet they both fall into the Women 18-49 demographic.

For decades, advertisers have clamored for more targeting options. The industry has finally answered their call.

Targeted advertising now a reality

There’s never been a more ideal time than now to leave behind the traditional targeting of the 1950s. Thanks to the massive deployment of smart TVs in the U.S., targeted advertising has reached new levels of precision.

Addressable TV advertising through smart TVs brings rich data with household characteristics to the industry, letting advertisers go far beyond traditional age and gender targeting. In other words, no more wasteful “Adults 18-49” campaigns.

Advertisers can build campaigns based on true buyer characteristics and past shopping habits by combining smart TV viewing data with third-party and first-hand metrics. The more granular the data, the more precise the capabilities of the campaign.

There’s never been a more ideal time than now to leave behind the traditional targeting of the 1950s.

Start taking advantage of targetability

This form of addressable advertising provides unprecedented targeting capabilities as well as the ability to report on post campaign results. Unsurprisingly, addressable advertising has taken off, even in its infancy. According to eMarketer, U.S. addressable TV ad expenditures will reach an impressive $1.26 billion in 2017, 65.8 percent growth over 2016.

Of course, this accounts for only a small slice of the $72.7 billion TV advertising pie. But the increased benefits and superior segmentation will continue to drive the adoption of targeted advertising. The takeaway then is, don’t limit your ad targeting to broad groups like “Adults 18-49.” Now is the time to educate yourself on the benefits of smart TV targeting capabilities in addressable advertising.

Alex Petrilli
Alex Petrilli
Director of Research Solutions
Alex has worked in media research his entire career, both in local markets and on a national level. He has participated in the evolution of viewing data from diaries to meters to STBs to smart TV. When he is not working, Alex spends time with his wife and four sons in Pacifica, California anxiously awaiting the empty nester days that may never come!