Once a far off dream, addressable TV has now become a reality. In this moment, technology around addressable advertising for television still lacks widespread scale and targeting capabilities. As it continues to get developed and perfected, however, advertisers will have digital-like addressability at a scale only TV can provide.
This roundup looks at today’s state of addressable TV, from its challenges to its imminent transformation of TV advertising.
1. The addressable TV market is in its youth. In a June 2017 article, nScreenMedia acknowledges the fast-changing TV industry and the growing pains accompanying the changes. The piece, titled “Broadcast TV, vMVPD’s & Addressable TV … A Cauldron of Disruption,” highlights that relationships with networks, ratings tools, and advertisers are all morphing. Addressable advertising is complicated, confusing, and has room to improve, the article claims.
Here’s how nScreenMedia puts it:
“But instead of the organized, standard’s based, managed industry, the addressable TV advertising space has many competitive players, spotty inventory pools, and several competing technologies that are running headlong into each other.”
2. Some advertisers still have to warm up to addressable. MediaPost staff writer, Toby Elkin, also discusses the challenges of addressable TV in his article, “Addressing the Challenge of Addressable TV.” Elkin points out that advertisers aren’t yet taking advantage of the TV addressability available to them, because they haven’t tapped into the wealth of viewer data out there.
“The challenge for advertisers is understanding which data they should use, and what’s out there that can help them with the audience they want to target,” Elkin writes. Advertisers are still buying spots based on Nielsen ad ratings even though they could be using data points like education, ethnicity, interests, and behaviors available from Experian and other third party data providers to really target their ads.
3. Once they try addressable TV, advertisers love it. Six out of 10 advertisers already consider addressable advertising an essential part of their media mix, according to MediaPost’s, “Why Advertisers are Bullish on Addressable TV.” Writer Andy Sippel, explains in his op-ed that these advertisers use targeted advertising to focus not only on “lower-funnel” sales but also on “top of funnel” brand awareness. “When advertisers know it, they use it. When they use it, they love it. And then they want more,” Sippel writes.
4. Advertisers are willing to pay the higher CPM of addressable TV. The MediaPost article, “The High Cost of Missing Out on Addressable TV,” written by Ben Legg, explores the demand for and value of addressable TV. He recognizes that TV advertising has always required a spray and pray philosophy. But he makes clear that with the introduction of addressable TV advertising options, this philosophy doesn’t fit. “Neither consumers nor advertisers will … tolerate badly targeted (and therefore irrelevant, frustrating and wasteful) TV ads,” Legg writes. “For advertisers, it’s efficiency. Smart advertisers don’t want to pay for ads that are seen by people who are not their target audience.”
Addressable TV: A freight train in motion
Is the addressable market a mature space, delivering on all our wishes for TV advertising? No. And this roundup proves it. Addressable is still young, with challenges to overcome. But it has momentum (it’s a freight train in motion), and an undeniably promising future.
Here’s my list of takeaways for this post:
- Addressable TV is the bright future of TV advertising and there’s no avoiding it, so you might as well embrace it.
- If you’re still buying spots based on ratings alone, it’s time to start looking for richer data/more targeted options.
- Start thinking about how you would spend your ad budget differently if you knew your ads could be more targeted.