Streaming Video Will Beat Addressable TV to the Punch

For years we've been hearing about addressable television, which is the ability to target TV ads to individual viewers much like you would online ads with targeting, and potentially even retargeting. In fact, eMarketer just released a report predicting that the addressable TV market will grow from $1.26 billion this year to $2.25 billion next year and $3.04 billion in 2019! Those numbers sound amazing. But they're not. In fact, even at $3 billion, addressable TV will only represent 4 percent of all TV ad spend, and the rate of increase is clearly declining. In my opinion, addressable TV is at least 3 years too late. In the time broadcast television has taken to catch up with online advertising, not only has online advertising lapped it repeatedly in most forms of effectiveness (save only brand impression), online streaming services are stealing TV's entertainment thunder, too. Streaming services from YouTube to Neflix and Hulu now attract not only top talent, but prime time viewership and awards. And with more competition on the way in Facebook Watch and Disney streaming (to name just two of many), television could well be staring down the barrel of an Adpocalypse. (For more on that, see our video from Monday.) With all of these online video sites coming up, addressable TV looks less like the wave of the future and more like the whimper of a declining ad channel. Will TV ever catch up to the targeting capability of online advertising? And even if it did, will it ever catch up to the interactivity and ability to launch a direct conversion? Even though Adobe added TV ad management and addressability to its marketing cloud, that feels more like the exception than the rule. Like tacking an analog tail onto the digital donkey. What seems more likely to be the state of things in 10 years? That TV adopts the capabilities of digital, or that smart TVs and other home devices based on streaming displace traditional TV in living rooms? Well, I still have TV with cable, but a quick survey of office Millennials shows what their choice is, and it ain't the triple-play. Younger folks aren't just cutting cords, they're wondering why the hell anyone had cords in the first place. In fact, the package deal is exactly what's wrong with TV for viewers and advertisers alike. It's 2017, you can watch exactly the media you want on dozens on online channels, and yet on cable you can only get content by channels packaged with dozens of other channels you probably don't want. It's the same with your advertising. The people you want, packaged with thousands you don't. This is following the same script online transformation has in a dozen other industries. Taxis couldn't give people what they wanted, so we got Uber. Stores couldn't give people what they wanted, so we got Amazon. Give people what they want, or the Internet will swallow your industry whole. And for TV, it's way too late to try to get addressable now.

Software/Technology

Streaming Video Will Beat Addressable TV to the Punch

Thorin McGee

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Thorin McGee