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To understand what Addressable TV Advertising is, we must first define it. Addressable is the ability to identify specific viewers based on information, including demographics, geography, and psychographics. So, an addressable TV is any TV or video device that is addressable. For advertisers, the key point in addressable TV is delivering different ads to different audiences at a household level. Learn more about Addressable TV Advertising here.
In the past, broadcast TV advertisers had to deliver their ads based on TV programs broadcast in specific time slots and geographical areas. With addressable TV advertising, they can send ads to specific people based on their interests, habits, demographics, and other data. This gives marketers a whole new world of possibilities for targeting customers and creating ad campaigns.
How does this process work?
Addressable TV advertising is similar to e-mail or direct mail advertising. The advertiser can send a letter to your mailbox based on data such as your lifestyle interests, income, shopping behaviours, family makeup, and a myriad of other information. This same methodology can now be applied to TV. Addressable marketing has been around for a long time, and marketers use it to target specific individuals rather than large groups of anonymous people.
What’s new is the availability of big data collected from devices including linear TV (broadcast/cable/satellite), over-the-top (Netflix, Hulu, Amazon, Sling, others), and CTV (connected TV). All these sources can now accurately identify customers and give marketers the information to define target audiences precisely. Information such as programs watched, devices owned, and online behaviour across devices can be used to create household profiles that are then shared with media providers, broadcasters, OTT (over-the-top) providers, and advertisers.
What are the advantages of addressable TV advertising?
The use of addressable TV advertising gives advertisers the benefits of traditional TV and newer digital advertising methods. What do these forms of advertising provide that can benefit marketers?
First and foremost, addressable TV gives the ability for marketers to very precisely target their advertising. With this level of targeting, the marketers can build campaigns to achieve any number of objectives, such as building brand awareness, promoting special offers, and increasing market share.
Ad relevancy is also another big benefit for advertisers. Most people do not want to see ads that have nothing to do with anything they are interested in. Marketers know that if you can get the right ads to the right viewers, sales will increase. Viewers are also more likely to pay attention to something that pertains to them. The ability to tailor advertising to specific viewers gives marketers a potent tool.
The major overarching benefit for any marketer is to drive increases in ROI (return on investment). The combination of precise targeting and relevant ads almost guarantees that campaigns will get positive results. Furthermore, the ability to ensure that ad campaigns get to high-value audiences means that you are not wasting a lot of advertising investment on people that are not interested in your products or services.
Are there any downsides?
We have touched on just a few of the major positives, but there are a couple of negatives to be aware of.
The addressable TV advertising industry is still relatively new but is developing very quickly. As with any new industry, there are growing pains. Advertisers have to deal with a vast array of different formats, different providers, and a lack of standards. This makes media planning for marketing campaigns much more complicated and challenging.
The other major issue for the addressable TV industry is privacy concerns. Security and privacy are major issues for users. Data protection and privacy rules and requirements are constantly changing at both private and government-mandated levels. However, the value of the information you gain is worth ensuring you secure the data and maintain a compliance strategy to protect your clients’ privacy and your brand image.
Final Thoughts
Addressable advertising has created a vast new universe of information for marketers and advertisers to leverage. The potential of the available data to target specific viewers across multiple media and devices is nearly endless. With the continued growth of CTV and IPTV devices, that reach will continue to grow. The challenges of standardization and security are small compared to the promise of a huge upside in marketing opportunities.
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