Acxiom

It’s been a long time coming, but the audience-based buying and selling of premium video advertising is finally beginning to unfold at scaleRight now, addressable TV is the hottest use case, and for good reason: more than 40 million US homes can now be reached via one-to-one ads on the big screen in their living room. This means that two neighbors can be watching the exact same program at the same time, and one might see an ad for an electric vehicle, while the other gets a spot promoting a wireless carrier.

The recent growth in addressable inventory and campaign activity has created lots of excitement. For those with a digital ad background, its tempting to view addressable TV as a natural, apples-to-apples extension to online ad campaigns and operating models. There are lots of parallels: Addressable TV is one-to-one, just like online. Addressable TV has frequency caps, just like onlineAddressable TV can leverage control groups to measure back end lift in outcomes, just like onlineIt’s tempting to think that Addressable TV really is just like online, right?

Hang on. Before making plans to copy-and-paste TV into a digital ad playbook, there are some major differences to considerNo doubt that just like digital, TV is going through an audience-based buying revolution, however: 

  • The addressable opportunity is premium. Addressable inventory draws from the two minutes of ads per hour sold by pay TV operators. Generally speaking, there is already a healthy market for this inventory when sold on a non-addressable basis to local and regional advertisers, so addressable executions carry a premium. 
  • Addressable execution works differently. Getting addressable TV campaigns on air takes longer than in digital. There are generally minimum campaign volumes involved.  Segment creation usually involves multiple processing steps.  Media buys (with a few nascent programmatic exceptions)  are executed manually, human-to-human.

The good news is that there are ways to bridge online and addressable TV. One of the most effective is to make use of the same household or individual-level segments across both channels. Here are some of the most practical ways we see to do that today:

  • Use apples-to-apples audience segments to coordinate TV and online planning, e.g. to estimate reachable target universe
  • Use the same apples-to-apples segments to coordinate execution, e.g. deploy online as a reach extension vehicle for addressable TV 
  • Measure de-duplicated reach/frequency and campaign conversion performance across TV and online 
  • Create privacy-safe big data analysis environments to analyze ad impression data

By the way, addressable isn’t the only way to apply audience-based advertising principles to TV. The same target segment definitions can be applied to non-addressable one-to-many ads. Non-addressable ads account for 99%+ of all TV ad impressions and include national spots purchased from broadcast and cable networks, as well as geo-targeted spots sold by pay TV operators. With these ads, advertisers and their agencies can:

  • Leverage household audience data to inform the planning of national and spot ad campaigns
  • Use TV ad exposure from one-to-many executions to inform back-end measurement
  • Inform online media planning and buying with TV viewing audience attributes built in a privacy-safe, modeled fashion

Taking a step back, there is a lot of change happening right now at the intersection of TV and Online. Over-the-top viewing via providers like Roku, Amazon, Sling and Twitter are changing how people watch. Networks, TV operators, agencies, advertisers and measurement players are innovating like never before.  

So, the good news is that ad buyers now have lots of data-enabled options for enhancing the impact of TV spend. The even better news is that standard household and individual level segments can be used — accurately and at scale — to bridge TV and online.

In any case, it’s safe to say the TV ad business is going to keep changing, and faster. The next few years will be critical ones, as buyers incorporate addressable TV into their mix, inventories adjust to the demand, and sellers start bundling audience-based cross platform TV + Online inventory. Don’t push pause now, theres much more to come!