Convergence at Last: Addressability Is the Good Word in Cannes

As the word “Addressable!” echoed from beach to yacht to luxury suite across La Croisette in Cannes, a solidly digital friend asked me, “What does that even mean?”

I smirked and replied, “It’s a TV industry term for what digital people consider programmatic TV-buying, and it looks like digital is going to have to adopt it in order to drag linear people into the future.”

Joking aside, that seems like a fair compromise. For too long I’ve watched speculation about which side would win the linear versus digital war when finding middle ground was the best solution.

The dream of addressable TV advertising has long been showing different households different advertisements as they view content. Of course, in digital this makes immediate sense for live-streamed content, but it actually applies fairly to on-demand streaming as well. Each screen gets a custom ad experience based on their data.

“For a long time the technology was our challenge… for the first time, all the technology has fallen into place,” said Comcast President of Advertising Marcien Jenckes on the FreeWheel beach. “We are ready as an industry to take on addressability at scale.”

The 2019 Cannes Lions festival proved a big moment for digital-linear convergence—big talk transformed into fleshed-out details, partnership announcements, and plans for the future. And addressability was central to this moment, emerging as a new common area are for linear and digital parties to congregate.

Yes, linear TV buyers have been stuck in their ways, but as linear CPMs increase as ratings fall, they’ve realized they need to chase their audiences on digital platforms. At the same time, these buyers have concocted a massive system to determine return on investment from their linear TV spend—and digital hasn’t fit into that scheme.

An over-reliance on third-party measurement has complicated matters, especially as the measurers haven’t been able to keep up with digital developments. I totally thought a VideoAmp panel I was watching was going to form a boarding party and invade the Nielsen yacht next to us—“Guys, I know we’re in spitting distance of the Nielsen yacht, but that doesn’t mean you have to actually spit at it.”

The new video platforms have also created their own walled gardens, leaving many to wrongly believe connected TV is a black box.

The CTV space is definitely a convoluted web of platforms, but the talk at Cannes gave me hope that industry players are trying to get on the same page, giving up perceived differentiators (such as audience data) for the benefit of the entire ecosystem. Perhaps it was just talk—and it’s known that in digital advertising that talk is particularly cheap—but there seemed a general recognition that the various players need to work together, and the tech bonds for these partnerships are appearing.

Key to this is data-sharing. As we’re seeing across a lot of digital advertising, audience data is less of a differentiator in digital video and TV… On its own. It’s not that audience data is commodified, but technology is enabling sharing without losing value—namely through cryptography. I was very intrigued by FreeWheel’s Blockgraph, which uses cryptography to pass proprietary data between partners.

This data flow also makes me curious about the future of walled gardens—Google, Facebook, Amazon, and potentially AT&T/Xander/Warner Media as well as Verizon. FreeWheel is owned by Comcast, which could put up a walled garden of its own with NBCUniversal as its content engine. Instead, the company is looking to partner with competitors like Charter Communications and Cox.

Certainly data-sharing is a way to circumnavigate the walled gardens—but could it also be their kryptonite? That’s been the argument of the Ad ID Consortium; in a massive market like TV with such a diverse set of players, data flow might really wound them.

Then again, someone on the VideoAmp panel admitted that the road to digital-linear convergence is littered with the carcasses of failed media consortiums, going back to Canoe 1.0.

Also, I wonder if the TV market will fall into the same holes as digital display, with advertisers attempting to cherry-pick audiences via addressable instead of seeing it as a tool for a larger media strategy. Jenckes suggested this was already going on a bit, but insight from Sky showed that wise advertisers were leveraging addressability with lookalike audiences to expand reach.

Addressability should be a great complement to upfront buys for major advertisers, but what about smaller and regional advertisers? Are they doomed to haunt Google and Facebook and have no fun on the tube? Well, that’s where the supposed “long-tail” CTV content gets interesting.

Future Today—whose Head of Programmatic, Katya Shkolnik, will be diving into the complexities of CTV at the Vancouver Publisher Forum—talked to me about how regional advertisers were leveraging location targeting on CTV to reach their audiences on ad-supported content. This could be a real opportunity for digital native publishers looking to break into the big screen and monetize video on CTV.

But there’s still the measurement disconnect—digital is “measuring glass, not people.” Digital is all about counting impressions on screens, when advertisers want household data. Advertisers are reluctant to change their ways because, as mentioned, they have whole systems built on GRPs, households, and demos. However, on a VideoAmp panel, Omnicom’s Jonathan Steuer suggested that one-by-one, the agency is convincing its advertisers that impressions are the future. Everyone on the panel—and indeed, on the yacht—seemed locked in agreement that the GRP needed to die.

At Cannes there was great hope for digital-linear convergence—but reality is no trip to the beach. Jenks commented that the next 12 months will be critical for the industry. Come Cannes 2020 (or even better, Ops 2020 right before Cannes!), we’ll hopefully be having a much more advanced discussion.