Addressable Was The Word At CES
It seemed that no matter what panel you went to at CES this year, if the topic was vaguely related to TV and advertising, the focus inevitably turned to addressable TV advertising.
As the author of a recent report on the topic, this was not all that surprising to me. The industry is excited about the prospect of addressable advertising and is coming to terms with the sort of automation that is necessarily a part of it.
What Exactly Is Addressable Advertising?
Addressable advertising means that viewers watching the same show will see different ads based on demographics, location and/or prior purchase patterns. For CTV (connected TV) and VOD (MVPD video on demand) this has been the norm for some time now, as the time-shifted nature of their viewership means it makes more sense to target specific audiences.
Linear TV has always been trickier; however, since that inventory is typically pre-sold during the upfronts or as part of the scatter market and the notion of reaching millions (or thousands) of people at the same time with the same ad has been a key selling point.
That said, both networks and brands are starting to come around to the notion of addressable.
Why Is Addressable Taking Off Now?
There are several key reasons why brands are looking favorably at addressable TV advertising. Key among these is the ability to achieve incremental reach, e.g., to reach audiences that may have missed the brand’s main linear TV ad buy or who are part of a demographic the brand wants to put extra weight against. By running ads that only reach that specific demographic, brands have a cost-effective way to more effectively target these desirable demos.
2020 will also see the launch of seven multibillion-dollar streaming services (eight if you count CBS), four of which—Hulu, Peacock, CBS All Access and HBO Max—will have an ad-supported option. In addition, the FASTS (free, ad-supported streaming TV services) like Pluto, Xumo, Tubi and the Roku Channel are also taking off, creating an even larger pool of available addressable inventory.
There’s also the prospect of linear network addressable on the horizon. New initiatives from both Nielsen and Project OAR allow advertisers to insert addressable ads as overlays onto smart TVs. Both systems promise to allow broadcast and cable networks to sell addressable inventory without the involvement of MVPDs. Both systems are expected to launch sometime this year, further increasing the amount of addressable inventory available.
The growth of addressable will further increase the value of automated buying systems who power those targeted buys. Brands and networks have become comfortable with the notion that the increased accuracy and transparency they get from automated platforms makes them the right choice for the new TV ecosystem.
“Both brands and broadcasters are finding that it’s a better system,” notes Brad Smith, Senior Vice President, Revenue and Operations, Videa. “They are able to gain efficiencies from automation that they were missing, while providing advertisers with the sort of control they’ve come to expect on digital media.”