Addressable TV is coming...but is it a dangerous trap or a new nirvana?

This piece was originally published on the Mindshare Ireland blog

"The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function."  F. Scott Fitzgerald

No matter how much we want it to be an exact science, marketing is a beautiful mix of behaviour change, communication, art, science and a hint of alchemy. One of the great/awful things about this industry is that there’s often no one right answer. What works for one scenario will often not work in another. That’s what makes it so interesting. And frustrating.

In this business, it literally pays to keep an open mind. I love the idea of ‘strong opinions loosely held’ in venture capital, and I think it also applies to what we do. Bias is bad for business.

One effect is that it can be hard to rationally analyse a new tech innovation. This happens to me quite a bit. I try to think deeply and see both sides of an argument, often changing my mind on big topics. One area that I’m completely torn over currently is addressable TV. I’m excited about the opportunities. But there’s also a voice inside my head saying that targeting strips out the things that make TV ads work.

Big daddy

Let's first look at the positive side. Though TV audiences are slowly falling, it remains the big daddy of brand building media channels - a premium, full screen, sound on, brand safe, high quality environment.

The common complaint about TV is the cost of entry, lack of audience insight and wastage. Digital’s targeting advantage has been a key factor leading brands to shift budgets online.

In this context, services like Sky AdSmart and other addressable TV options intuitively feel like a huge step forward. They allow brands to isolate and target segments of consumers, marrying the best of big brand television with the targeting power of digital. TV ads can now be bought programmatically based on locality, demographic, family makeup, income, or even using a brand's own data. In theory, unique creative can be delivered to unique homes, opening up a whole world of possibilities.

For many marketers, there’s a belief that the delivery of a personalised, uber targeted message to a buyer is the holy grail. Targetable TV is a whole new way to optimise your biggest channel. It’s an easy sell to brands.

It's also a boon for the networks. Now local brands have a chance to use the service. And for media planners, the possibility of being able to use one true metric for all video is mouth-watering (albeit a long way off yet.)

So far so good, right? This could revolutionise the medium.

Truthiness

But there's another side. Just because we can target TV advertising does it really mean we should?

First, there’s a dollop of truthiness about the idea that targeting is everything. It sounds plausible, until you look a little closer. The ability to target addressable segments is a benefit. But only when used sparingly. As P&G and others have found, the scourge of 'too tight targeting' can result in speaking to smaller and smaller audiences, or worse, people who are already loyal to and regularly buy your product. You can literally target yourself into irrelevance by speaking to an echo chamber.

As Rachel Kennedy of the Ehrenberg-Bass Institute says, “targeting is like salt in cooking. A little is good, it adds flavour, but too much and you ruin the dish.” That’s a big watchout. Brands risk making themselves culturally invisible if the get things wrong.

Some wastage is a good thing. Brands need wastage in order to grow. With addressable TV, is there a danger that we go down the digital route of over-targeting? Could removing the shackles actually commoditise the whole medium by making it about lower funnel activity rather than what TV does so well - brand building.

I’d also have creative concerns. The unintended consequence of opening a platform to smaller advertisers with less budget is that the ad creative gets worse by default (just ask Snap or Instagram). Sky and others are helping with this, and production companies now provide creative at a fraction of the cost of big agencies. But still, one of the benefits of TV advertising is that you’re (generally!) surrounded by high-quality programming AND high-quality advertising. Addressable could change this.

Addressable TV also strips out the benefit of ‘collective knowledge’. There’s a positive signalling effect when viewers know that hundreds of thousands of other viewers are seeing the same ad. If breaks become stuffed with low quality local ads (and in fairness broadcasters have stopgaps in place to avoid this for now) then TV becomes less powerful without the cultural impact of lots of people seeing the same thing at the same time.

Also, we know that one of the key drivers of brand choice is brand fame. Fame helps create ‘mental availability’, meaning a brand is easily recalled at the moment of choice. But if we start to incessantly carve up large audiences into smaller and smaller pieces, speaking to people with less creative and more personalised messaging, it becomes very difficult to build fame.

Thinking short and long?

So that’s both sides of the coin as I see it. Where does the truth lie? Usually when I’m writing something, I have a concrete view on the topic at hand. With this, I’m not sure. 

Maybe the answer is rooted in short term/long term question? I’d argue that in the short term, we’ll see excitement, hype and effective campaigns through addressable TV. There’ll be a huge first mover advantage.

But in the long term, as addressable becomes a mass market option and some of the unintended consequences above start occurring, there’s a danger that we start to forget some of the things that makes TV great for brands. This is when we’ll need strong leadership, restraint and clarity of thought.

Only a fool makes concrete predictions about such a fascinating and changeable industry. I’m safely perched on the fence with regards addressable TV for now.

Which side do you fall on?

Shane O'Leary

@shaneoleary1

Sign up for my newsletter here for more good stuff like this