TV Ad Industry Takes On The Internet With Addressable Advertising

Rich OrdAdvertising

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The traditional television industry is finally feeling the pressure of the data rich micro-tuned digital advertising world of the internet and is hitting back with addressable advertising. For years advertisers have become accustomed to extreme targeting with website advertising and particularly with search advertising. Over the last few years micro targeted video ads have become the norm as video is quickly becoming mainstream on social media platforms such as Facebook and Twitter. This is causing a shift in ad spending from television to the internet that the TV industry is working to stop, or at least join in on.

The TV industry's first step was to make viewing options available on all devices, often referred to as over-the-top (OTT) content viewing. This has been sped along by users, especially millennials and even younger teens watching more and more traditional television content on small internet connected devices. Additionally, smart TV's are connected to the internet and more importantly are also being connected to smart cable boxes capable of serving the same kind of targeted ads that are served on the internet. This targeted advertising is called addressable advertising and it is the television industry's competitive answer to the internet.

From MediaPost's Editor in ChiefJoe Mandese:

“One of the things we’re thinking about is whether TV channels go away and become apps,” Brian Hughes, senior vice president-audience analysis and practice lead at Magna, told MediaDailyNews during a preview of the report.

Hughes added that while the way consumers and industry practitioners think about television may be changing, its vitality as a medium remains as important as ever. It’s just becoming more complicated to track, understand and manage.

“The message you keep hearing from the industry is that TV is dead, but I think we’re finding that it’s a lot more complex than that. It’s the fact that OTT usage has exploded. TV is not, in fact, dead. It’s just changing. But it remains a central experience for most consumers and a vital medium for most advertisers,” he explained.

Asked what it’s changing into, Hughes said it’s part of the same meta theme that has been transforming much of the traditional media marketplace: a shift to an “on-demand world, where content is at your fingertips and you can get it where you are on the devices you are on.”

With addressable advertising advertisers will be able to target diapers in a video commercial to a stay-at-home-dad watching ESPN on either his mobile device or even on his home TV, while others watching the same live or recorded show will see different commercials based on their own demographic, sociographic and behavioral data. No longer will all men be shown shaving and truck commercials.

Big data is being collected and utilized by companies such as Google's DoubleClick to make addressable advertising possible enabling the merging of traditional television viewing with the viewing of that same content on small devices to serve targeted adverting.

"Advertisers and programmers who embrace the fundamental shift from a “big game” mentality to one of reaching viewers across many screens and devices will be rewarded with up-to-the-minute flexibility, deeper audience insights and much more dependable ROI data," according to a recent report by the DoubleClick the Marketing Team and posted by Anish Kattukaran. "With much more granular attribution and measurement, advertisers can now understand the true performance of their ad–including engagement, brand lift, and conversions. Addressable advertising creates value for everyone in the advertising chain. This lets marketers reach and attribute highly specific targets, and helps broadcasters and distributors better value their content and monetize multiple audiences at the same time. It also give the viewers themselves a better experience, with ads that are more interesting and relevant to them."

Advertisers can still advertise to the masses, such as in the Super Bowl, but will also have the option of using granular data attribution to reach subsegments of the audience that are more likely to be interested in their offer. This is both a benefit and a challenge to the television industry because targeted advertising will bring higher CPM's but with this new data advertisers will also be able to track conversions (sales) and know whether their ads are working or not. This is something traditional TV has not had to deal with and has been a huge frustration to the internet advertising industry because they have had to work with advertisers on this extreme tracking for years, while watch ad dollars go to TV which didn't have to prove out their value. Addressable advertising is leveling the playing field.

True conversion reporting for television and television content across all devices is the holy grail for advertisers because it lets them target ad dollars much more effectively.

"Advertisers and programmers who embrace the fundamental shift from a “big game” mentality to one of reaching viewers across many screens and devices will be rewarded with up-to-the-minute flexibility, deeper audience insights and much more dependable ROI data," says Kattukaran. "With much more granular attribution and measurement, advertisers can now understand the true performance of their ad–including engagement, brand lift, and conversions."

Rich Ord