It’s time to address Addressable TV
Over the past few years, it’s been widely broadcast that TV is a dying channel and the social media giants are some of the biggest protesters in this picket line against TV. Yes, it’s true that traditional TV viewing figures are on the decline, but TV is still dominating our video consumption.
Source: 2016 BARB / comScore / Broadcaster stream data / Ofcom
That being said, it’s not as black and white as it used to be (literally). The way in which we view TV is more fragmented than ever before, and due to the development of technology and multi-device ownership, it’s been an ever-increasing problem for broadcasters to capture viewers’ attention.
The rise in technology is not all bad
Advancements in tech is not all bad for TV. For one, it’s allowed Sky Media to pave the way in Addressable TV. Sky has built tech into its boxes enabling it to be the first broadcaster to launch an Addressable TV solution, and with the rise of smart TV ownership, ITV and Channel 4 are working on an Addressable TV partnership too; their key focus for 2018.
It’s now estimated that 30% of audiovisual advertising (including online and timeshift TV) will be addressable by 2022; 10% of which will be traditional TV. Although 10% might seem low, it’s a big increase from today and a massive shift in what historically has been an antiquated channel.
With these new forecasts, it’s now time to address Addressable TV.
So, what exactly is addressable TV?
Addressable TV advertising technologies enable advertisers to selectively segment TV audiences and serve different ads to these audiences. Segmentation can occur at geographic, demographic and behavioural levels, with the transaction happening through cable, satellite and Internet Protocol Television (IPTV) delivery systems & set-top boxes (STBs). Think of it like Direct Mail for TV.
Just imagine there’s a TV ad-break and within that, different ads are served to different households depending on who the viewer is.
Targeting the traditional way
It’s an exciting time for TV advertisers, because the traditional way is clunky and there is a good measure of uncertainty and wastage. The traditional way requires you to buy trading audiences that are pre-determined by the broadcasters which are simply just demographic buys. To add to that, these trading audiences only give you access to shows that index highly against your chosen audience.
So, for example, you’re a young, female, fragrance brand and your ad plays out in a programme that indexes highly against 1634W; Made in Chelsea, let’s say. When your ad plays out you’re going to reach your audience, but you’re probably going to reach an older female audience too and maybe even men who have a guilty pleasure in watching Mark Francis on a Monday night. And that’s the problem with the traditional model, there’s too much wastage.
Traditional TV is about trying to find programmes that your audiences will watch whilst doing it cost-effectively. Addressable TV eliminates this. It’s about targeting the person and not the programme.
So advertisers should just do addressable TV then, right?
One of the biggest issues with the growth of Addressable TV is the scale it can offer. Sky, who are the biggest provider in Addressable TV solutions in the UK, have 7 million Sky households that are readily available for Addressable TV, but that’s only 7 out of a total of 27 million TV households in the UK.
ITV and Channel 4 will have the capability to reach 5 million next year through Samsung Smart TVs, but to put this into perspective, this is only equivalent to a spot in Emmerdale on a Thursday night.
So with the scale not quite there yet, it’s probably not the right time to re-invest all TV budgets into it.
The other issue is optimisation. As most Addressable TV solutions are set up to target certain audiences and not based on results, we can’t optimise to best performing stations, creative, dayparts and days of week, which is an issue for direct response brands.
Given the technology and data Addressable TV requires, it’s a surprise that it’s the broadcasters behind the curve on this. This demand for spot analysis and optimisation capabilities will require broadcasters to evolve how advertisers can buy Addressable TV.
Transforming campaign effectiveness with Addressable TV
Albeit with limitation, as Addressable TV evolves we will witness a revolution in the way we plan and buy TV, and with the right use of data, creative and planning, TV campaign effectiveness will be transformed.
TV is not dead, it’s alive and kicking.