Addressable TV: The New Kid in Town

There was a lot of talk at the recent Cannes Lions Festival about addressable TV advertising. What will this mean for decision makers and those entrusted with operations on both the buy and sell side of the business?

First: Digesting Alphabet Soup

As traditional ad-supported linear television morphs into a digital ad buying ecosystem, the jargon and definitions of “Addressable TV,” “Advanced TV,” “OTT,” “Connected TV,” and other acronyms can be inconsistent and create confusion for ad tech, buyers and sellers.

The IAB produced a nice infographic on what they call Advanced TV Targeting in late 2018, which is the best I’ve found in explaining all the moving parts. It defines “Addressable TV” this way:

  1. Addressable TV allows advertisers to purchase audiences as opposed to traditional methods of buying based on programming.
  2. [It provides the] ability to serve different ad content to different audience segments watching the same TV program on IPTV and set top boxes, based on specific audience targeting, in either live, playback or VOD mode.
  3. Addressable VOD: A subset of addressable TV where the ad is inserted into cable programs within the VOD content, accessible through a cable provider set top box.

Contextual Targeting Context

For years, advertisers and marketers have used the programming environment of linear TV to define the audiences that will be reached. The ratings estimates provided by Nielsen explained who was watching TV programs in broad demographic terms (age and sex). That led to different programs, day-parts, and networks commanding different pricing for ads on a CPM basis, depending on whether it had a richer mix of women, men, younger, higher income or light TV viewers etc.

The surrogacy of program viewership, however, is steps away from actual viewership, since the old approach did not even provide commercial ratings, nor whether the viewer was watching the ad or not. It was bought as an opportunity to be seen—and no more.

As marketers began to enjoy the benefits of digital video with its superior targeting, tracking, and accountability, that very broad method of contextual targeting seemed less and less desirable, and the “waste” of reaching viewers outside strict target audience definitions became more and more intolerable. Context alone was no longer enough.

What Does This Mean for Ad Ops?

So much of the future success of addressable TV depends on the migration of digital video best practices and the ability to continually adapt and improve ad targeting as new technologies arrive. And the experience and learning that both video and non-video publishers have gained in the online and mobile programmatic space will be highly valuable in the T/V (Television/Video) world we see emerging.

According to eMarketer, TV still leads single media ad spending at more than $70 billion a year or 29% of all measured ad spending. There are signs that 2020 will be a significant growth year for person- or household-level targeting in TV, driven by arriving technologies.

5 Technologies to Watch for Addressable TV

Ambitious Ad Ops practitioners can invest now in learning about and tracking trends in the following technologies and platforms, knowing that both viewers and advertisers love the ability of TV, soon to be T/V (Television/Video), to tell a great story in sight, sound and motion.

OpenAP introduces standards for targeted TV buying led by the consortium of NBCU, Viacom and Fox by:

  • unifying and standardizing targeting for both linear and digital TV platforms, allowing incorporation of first-party advertiser data.
  • Testing in second half of 2019 an OpenAP buying platform for advertisers and agencies. This offers an alternative to the many “walled gardens” of Google and Facebook where data is captured, held, and controlled by the owner and sold to the buyer.

ACR is Automated Content Recognition technology that can read what content is showing on an internet-connected screen including Smart TVs. This allows for second by second tracking of viewability, and with device owner permission, matching it to behavioral and demographic audience definitions on a device-by-device basis.

DAI is Dynamic Ad Insertion, that allows content providers to place ads within content for target audience definition (A), with one ad going to one home or device, and a different ad within the same content stream or VOD distribution path that will reach another target (B) home or device.

ATSC 3.0 is defined by Digital Trends as industry-created standards that “combine OTA broadcast signals with your home internet. At the base level, actual programming like shows and movies are broadcast and received over the air, while commercials are provided over the internet [through DAI].” This opens the door to addressable TV within the historically one-way broadcast TV sector.

CDP is Consumer Data Platform and has become a key part of the ad targeting equation this year. AdMonsters describes it this way: “CDPs use first-party data (and can combine it with second-and-third party data) and identity resolution to provide a single customer view that can be accessed in real time for a host of marketing, advertising and customer experiences needs. CDP data is continuously processed and maintains a persistent customer record over time.”