What is Addressable TV?

 

Addressable TV is an advertising technology which allows brands to reach audiences with far greater specificity than is normally associated with TV. It is an automated delivery that sends ads only to specific households that qualify to receive them. At its heart, addressable TV uses data (provided by set top boxes and other data collecting devices) to reach people and not standardised audiences.

 

How does that differ from the way TV ads used to work?

 

Traditionally, we’d have audience data, like typical age and gender of the audience, and use this information to target particular times and channels with broad-stroke brands and products. This type of ad serving is mass market advertising. Big reach, with a certain amount of wastage a given. It really wasn’t a good idea for brands who were looking to reach very specific consumers, because we didn’t have the necessary level of detail about the audience and couldn’t be that specific about who we were reaching even if we did. Making assumptions on basic demographic/channel information, without knowing who is watching, inevitably leads to advertising being served to unsuitable audiences. Which is why mass marketing on TV tended toward products and services that were of interest to wide audiences, where a format with huge reach was most effective.

 

Traditional TV ads rely on predicting (however accurately) who will be watching a particular show at any given time. Addressable TV removes the need to make such predictions.

 

One further difference is the real time nature of addressable. It knows who is watching, right now, removing one further level of wastage from the equation. Qualifying households who don’t happen to be watching the screen simply don’t get served.

 

So, what kind of data could addressable TV provide?

 

In theory, the possibilities are endless, but let’s start with the basics. Behavioural, demographic and geographic data is far more accurate with addressable TV. The advertiser would have a greater level of assurance that their campaign was headed toward interested screens.

 

Beyond this, further audience data might include highly specific attributes like buying habits, lifestyle and ethnicity. This level of granular segmentation opens TV advertising to brands who don’t have mass-market products/services.

 

Isn’t this this the same as programmatic advertising?

 

Similar, in that they are both automated methods of advertising delivery, but different in that standard programmatic still relies on someone, somewhere predicting who will be watching a certain show at a certain time. Addressable can be thought of as a sub-set of programmatic advertising; one that allows for a far greater level of household level targeting.

 

Sounds good! I have a brand/product/service that will appeal to a niche/refined audience – when can I start using addressable?

 

As of 2014, research (by GroupM, a US based media planning and buying agency) shows that 40% of the US could be reached via addressable. This is not the case in the UK, for a number of reasons which could broadly be described as the result of the different ad/data culture here compared to the US.

 

This is changing rapidly however. Sky and their Ad Smart platform, for instance, are proving that this use of data isn’t just good for targeting but also has a positive effect on ad viewing itself.

 

As the industries involved wake up to the tangible benefits of addressable TV, we’d expect to see far greater take up in the not-too-distant future. And the more broadcasters that collect and provide this data, the more effective the platform will be as a whole.

 

By Oliver Brown