Addressable Television Is Ready for Prime Time

Today, addressable targeting has become the foundation in online advertising, driven by rich, actionable data that makes it possible to deliver relevant online ads to consumers increasingly on a 1:1 level.

However, in the television environment, there is a gap in use of the wealth of data available in the digital world. TV has been offering a “mass” media approach driven by a network’s data offerings: “day parts” (times of the day like primetime, late-night, daytime, etc.) and programs to reach an advertiser’s desired target audiences.

As technology and data innovation occurs, TV will become the next medium to be transformed by data-driven marketing. The wealth of digitally enabled data becomes relevant in the delivery of specific ads to specific households for TV advertising.

Out With the Old…
While TV has been a very important contributor to a brand’s media plan as one of the largest mediums where brands will allocate their advertising dollars, innovative advertisers will begin to invest based on their ability to more accurately target audience segments derived from real-people-based data. As the consumer’s media consumption continues to shift to desktop and mobile devices (think TV anywhere), the digital ecosystem is disrupting television’s traditional model of panel-based targeting and measurement.

Panel-based media planning has long been used to reach an advertiser’s target audience. However, segmenting a panel-based audience using demographic characteristics such as age, gender, location, or education level is exceedingly costly with relatively small return on investment (ROI) when compared to precise audience targeting and increasingly available 1:1 targeting options.

The following scenario is fast becoming a reality:

Thanks to Internet Protocol television (IPTV), it is possible that during the same programming, one advertisement can be served on the TV in a household’s living room while an entirely different advertisement is served on the TV in the household’s bedroom, all in real-time based on data about the household. With this type of 1:1 marketing delivered through television at scale, the opportunity for marketers becomes really interesting.

It’s also worth examining television viewing patterns as addressable advertising gains its broadcast foothold. Mobile viewing is replacing traditional television viewing, and mobile devices are just that – mobile. As opposed to a big box shared amongst a family or group of roommates that characterizes traditional television viewing, digital delivery of content via mobile devices that are always with consumers enables a highly customizable and individualized experience in viewing content, as well as in the delivery of ads.

Consider also smart TVs. In addition to mobile devices that accompany consumers wherever they go, smart TVs are permeating homes and connecting viewers. As smart TVs mirror the app world, targeting will surely follow suit to become more personalized and 1:1.

…And in With the New
The digital delivery of television content and advertisements necessitates certain changes in the agency buying model as well.

While upfronts have been a perennial event for television advertisers, and programmers, this data-driven approach will create new buying models that look like digital.

Could there be a world where an advertiser buys Men 18-49 who have an affinity for trucks on programs that are less obvious and likely are outside the typical day part planning process? I believe this traditional day part TV-buying model will adapt to digital TV where large segments of audiences are purchased based on real-people-data supplementing the longstanding panel-based audience measurement.

With 1:1 targeting, advertisers’ messages will be delivered on an individual household basis, and will enhance the brand experiences. The same data that informs the most relevant advertising messages delivered on a consumer-by-consumer basis can also be used to deliver totally unique brand experiences, which in turn, can inform overall branding strategies.

Addressable TV targeting also calls to mind programmatic buying. Many buyers bucket addressable targeting and programmatic together because of the nature of audience buying on a 1:1 basis. If we assume that digital will enable addressable advertising for television, then programmatic buying will shortly follow suit into the TV buying world. How will this disrupt the flow of TV dollars to traditional outlets?

In short, in the same way we saw ad dollars migrate to mobile platforms, we will also see traditional TV dollars going toward addressable targeting on digital platforms as advertisers can more accurately segment their audiences on a 1:1 basis.

Advances in addressable targeting and digital television viewing are bringing 1:1 marketing at scale across channels closer to a reality. The ability to individually target consumers will result in more relevant ads in the right content environment, and will drive a marketer’s ROI.

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