Addressable Targeted Advertising

Digital Expectations in a Television World

(MARTECH ADVISOR) – Remember the “good ole days” in advertising? For starters, there weren’t that many options for reaching consumers. You could run a spot on TV or radio, a print ad in a magazine or newspaper or a billboard in outdoor advertising. Targeting was almost exclusively based on demographics—females, 25 to 54—and success was measured primarily by how much of your target audience was exposed to the ad.

That was consumer advertising for many decades. But then about two decades ago, not long after computer scientist Tim Berners-Lee invented the World Wide Web, the world of advertising changed forever. (Despite his claim to the contrary, Al Gore did not invent the Internet.)

Once people began consuming content via computers, advertisers had new ways of identifying consumers and knowing when they were exposed to a digital ad. As these methodologies advanced, so did the ability to target and measure ads.

A Brave New World

Today, advertisers have nearly unlimited ways to target consumers using digital advertising: what they paid for their house and who lives there, the cars they drive, the groceries they buy, the places they go and the hobbies they enjoy. And the same source of data thats used for targeting can also be leveraged to measure the impact of the advertising. It’s no longer good enough to know if they were exposed to the ad; advertisers rightly want to understand if the ad caused the person to visit a store and purchase the advertised product.

Now that advertisers have grown comfortable with the precise targeting and measurement of digital advertising, they expect to have the same ability in traditional advertising, including the medium advertisers choose to spend the most dollars in:  television. “As television advances with things like addressable TV and set-top box data, there is an increase in requests from clients to apply the same targeting practices and audience-defining capabilities to TV as we do in digital,” noted Denise Colella, Senior Vice President of Advanced Advertising Products and Strategy at NBCUniversal in an interview with eMarketer.

Addressable TV to the Rescue

While digital-like targeting and measurement isn’t yet possible with linear television, it is with addressable TV.  Households accessible via addressable TV can receive different ads based on who they are and what they are likely to buy. While during a commercial break I might see ads for Mercedes, Nutella and a drug prescribed for cancer treatment, my neighbor might see ads from Chevy, Pampers, and eTrade. The addressable set-top box acts much like a digital ad server, determining which ad to serve up based on who is receiving the ad.

In 2016, there were 68 million addressable television households in the US, being served by providers such as AT&T’s DirecTV, Dish or Comcast’s xfinity. Advertisers running ads on addressable TV can leverage many of the same data sources for precise audience targeting and measuring in-store sales lift, enjoying the same benefits they have grown accustomed to with digital advertising. It’s especially ideal for regional brands who don’t want to reach a national audience, making television affordable to advertisers who previously couldn’t afford the waste of linear broadcast TV.

But Wait, There’s More!

Relying on addressable TV as the silver bullet presents challenges, however.  For one, you still won’t be able to reach so-called “cord cutters”—people who have ditched cable television for more affordable streaming services, such as Hulu and Netflix. Nor will you reach “cord nevers”—people who’ve never subscribed to cable television. That’s a growing audience, with one out of every five U.S. households choosing not subscribing to pay television. It’s most prevalent with younger audiences—often the most coveted consumers—with adults 18 to 34 chalking up more than 30 billion hours watching television via digital methods on demand vs. only 19 billion hours watching live television.

And then there are the multi-screen viewers, which is just about everyone today. A Nielsen Technographic study in 2015 found that 65% of U.S. online adults use another device while watching television. Who hasn’t picked up their smartphone while simultaneously watching a TV show or had their tablet or laptop balanced on their lap while watching a movie?

The point? Advertising shouldn’t be an either-or proposition, but rather an and proposition . Smart advertisers are running both addressable television campaigns with digital campaigns, in a coordinated and synchronized manner. Providers such as DirecTV offer the ability to purchase a single ad campaign that reaches the identically targeted households on both addressable TV and their digital devices (smartphones, tablets, desktops, laptops). That way they are assured of reaching both the pay-TV subscribers as well as those only consuming content on digital devices and reaching everyone simultaneously during the same commercial breaks. What’s more, the advertiser receives a single measurement study for the campaign that compares the sales impact of those reached only by digital TV, those reached only via their digital devices and the incremental gains from being reached on both during the campaign period.

Talk about the best of both worlds! By maximizing reach and frequency with the target audience—no matter how precise—advertisers enjoy the rich, precise targeting and meaningful measurement they’ve grown accustomed to with digital advertising while also leveraging the tremendous brand impact made possible by television commercials. It’s truly a win-win: the advertiser achieves more effective and impactful promotion while the consumer gets to enjoy consuming content where, when and how they choose.

It’s a brave new world in advertising—one that no doubt would have heads of the “mad men” of the 70’s spinning—but one that promises to finally achieve true people-based marketing  by treating every consumer as an individual no matter how and where they choose to consume content.

Written by Chuck Moxley, Chief Marketing Officer, 4INFO

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