Addressable Advertising at The Center of TVOT

One of the things I love about the semi-annual TV of Tomorrow Show is that you can get a sense of where the industry is heading by looking at the ultimate tilt of the panels. For the most recent show, held in New York City earlier this month, that place is addressable advertising, which is sure to be in the spotlight in 2019.

Panel after panel kept swinging towards this topic, even if it wasn’t the main idea they were discussing. Addressable is coming and there’s no way for the industry to turn back. 

Most of the conversation was hopeful, though there was consensus that for people who are used to buying and selling TV the traditional way, the notion of an all-addressable future is scary and one they’re not readily inclined to embrace.

The biggest issue panelists identified is that addressable can initially be more work than traditional linear. There are segments to define that aren’t Nielsen segments, audiences to verify, and, if you’re a network or local broadcaster, there’s the work and initial uncertainty involved in actually selling off audience segments.

That’s the downside.

The upside is that there’s the chance for more profits, better targeting, better results and happier viewers. 

The Best Use Case for Addressable

An issue that frequently comes up is just how much inventory should be sold on an addressable basis.

One school of thought says that addressable is ideal for a certain level of advertiser, someone who is looking to target between 5 percent and 30 percent of the audience. 

An opposing school says that every ad should be sold on an addressable basis and that future advertisers will have the option of buying whatever percentage of the audience they are interested in reaching and both sides will have to agree on a price.

The value of addressable also depends on what the ultimate goal of the commercial is. While television is an amazing vehicle for image advertising, e.g., ads like Nike’s “Just Do It” campaign, those ads are frequently aimed at a larger portion of the audience than retail or direct-to-consumer ads, where the goal is to reach people who might buy the product as a result of seeing the ad. 

The problem is that while the latter are easier to quantify, a strong argument can be made that image ads are the best use of television as a medium, given brands’ ability to tell their stories in what are essentially impactful high-production value mini-movies.

The Future Is Addressable and There’s No Turning Back

If there was any consensus overall, it was that an all-addressable future is all but inevitable. Delivery will continue to move towards some form of digital or advanced protocols with digital features like ATSC 3.0. 

Shereta Williams, president at Videa, an online marketplace for automated television advertising says, “advancements in ATSC 3.0 will enable interactivity on-demand for over-the-air local television. There will be further consolidation which could go well for advertisers by creating cost efficiencies and new opportunities for monetization. However, there is a possibility local viewer may gravitate toward local news apps for up-to-the-minute content.”

The real question is when?

How long will it take for television’s strongly entrenched advertising ecosystem to make the switch to fully digital and fully addressable?

Estimates ranged from five years to twenty, but if I had to guess, it will happen within the next five to ten years, reaching critical mass shortly after year five.

As wiser folks have said, “change happens slowly...and then all at once.”

There’s no reason to think that the shift to addressable will be any different.