There’s good news for people who enjoy watching video content and the advertisers trying to reach them. It is becoming less likely, because of the addressable nature of many platforms, that those who cut the cord of cable TV will see advertising that isn’t relevant to them.
Yes, it is becoming more common for cat owners to see cat food commercials instead of dog food spots, and less common for people who have just bought a car to see car ads as if they are weeks or months away from buying a new set of wheels. And that is not because viewers are getting better at filtering, but rather the platforms, media planners and buyers are starting to work together more closely and with better strategies to reduce the frequency that a consumer will see an irrelevant ad.
The addressable difference
Addressable TV is a method of delivering targeted ads to digital TVs that have a cable connection, whereas addressable over-the-top (OTT)/CTV is a method that delivers targeted ads to any device used to stream content via internet services. The main difference between addressable TV and CTV is that the latter is capable of leveraging data to allow advertisers to target very specific groups who watch paid content on a big screen. With addressable TV, people get the same experience as traditional TV albeit with custom advertising.
With the exploding CTV landscape and channel options, auto companies, to name one industry, are keenly interested in investing ad dollars with these content platforms as data and targeting algorithms make it easier to reach consumers with messages they won’t be tempted to shut out.
According to Gitnux MarketData, more than 80% of households have access to at least one subscription video-on-demand service (SVOD). Almost 40% subscribe to three or more SVODs. The audience for addressable ads is there.
Digitally powered TV environments offer significant advantages and opportunities to advertisers, publishers and agency buyers, such as:
- The opportunity to reach the right audience with the right message, reducing ad waste and saturation with more effective targeting.
- The ability to link video investments directly to consumer actions, connecting the ROI from upper-funnel awareness to lower-funnel conversion to offline sales.
- With the right data, advertisers and/or agencies can see the entire picture of the customer journey touchpoints across channels and platforms and plan media for greatest outcomes.
Addressable and CTV are true game changers if advertisers and agencies have access to the data and solutions to unlock their full power. When content distributors have the architecture to leverage viewing data into patterns that auto advertisers can action with ads targeted at consumers based on their clicks, streams and categorized attributes, then these advertisers can serve an ad to those who are truly in market to buy a vehicle in a specific segment, like electric vehicles or minivans.
With that level of data, the advertisers can benefit from knowing how to use more productive targeting, superior ad sequencing and cross-device tracking. Companies are far better able, compared with even a few years ago, to deliver more meaningful, effective reach, measure the effectiveness of their overall advertising strategies and determine whether the media reach influenced buyers.
ROI and strategic ad suppression
Better performing targeting easily justifies increasing ad investments. That level of targeted media may cost more, but ad relevancy, on top of reach, is the holy grail.
You might reach the same number of consumers, or even the same consumers, with messages and content that is dumped into the marketplace via cheaper, broader media buys. If you’re smartly using data to remove recent buyers, though, then you’re avoiding waste.
Publishers and streaming services need to invest in the right data partnerships to actually create the targeting products advertisers want, which will help position themselves to get their rightful piece of the pie in the CTV boom.
What is at stake? Over half of U.S. consumers no longer pay for cable TV or other traditional pay-TV services. According to a report from Insider Intelligence, 47.6 million American households are now cord-cutters, and by the end of 2023, 54.4% of all Americans will no longer pay for a traditional cable TV service. That’s a lot of lost eyeballs if advertisers aren’t smarter about following them where they are going.
Advertisers are increasingly able to balance quantity and quality. Just reaching large numbers of consumers is no longer the goal, but rather delivering impactful reach meaning leveraging the best addressable platforms with the best data to ensure they are investing to connect with the most meaningful consumers for their brands.
Actionable data is key
Working with partners who provide actionable data gathering and analytics will lead to improved targeting, superior ad sequencing and cross-device tracking. And although there may be additional costs for advertisers, it will lead to more effective strategies and significantly higher ROI from media campaigns. Here are two strategies to consider, using the automotive vertical as an example:
Build audiences and target them with precision. Leverage granular data (segments, geography, trim level, purchase history) to ensure you’re delivering the right ads to the right people. This reduces ad waste and over-saturation while improving personalization and ad relevance. For example, an advertiser for a luxury brand can “address” its buy to consumers in a certain economic and geographic set, while suppressing ads to those who have purchased a vehicle in the last six months or a year, or who aren’t and won’t be in-market for a luxury vehicle. The quality of messaging to the right people is critical to creating a consumer experience that builds brand equity and is critical to a truly effective campaign for advertisers.
Look at the marketing funnel through a new lens. Leverage deterministic data to connect consumer engagements to actions—including offline vehicle sales. With addressability, you can make these connections at all levels of the funnel, and you can be strategic about when/where you apply it. Offline sales likely isn’t your primary metric in the upper funnel, but it can play a role.
Act now, trust in the data
Automakers are demanding accountability that only addressability can deliver. They are no longer writing blank checks for massive media buys. And advertisers and publishers alike need to be able to prove that their strategies are working to get their piece of the budget pie.
The more relevant advertising messages are, the more likely consumers will be to engage. Addressable TV offers massive advantages to both advertisers and agencies, as well as publishers that when paired with data from the right data partnership, you get better, more targeted advertising, and closed-loop measurement capabilities.
“With the advances in targeting capabilities on TV, we’re now able to leverage the biggest screen in the household to facilitate conversation among family and friends in a highly relevant way,” says Jim Johnson, vp of account planning and lead of automotive solutions at VDX.tv, a global video advertising technology company. “For example, we can focus on generating excitement for a model launch by showcasing off-road capability to households that previously exhibited interest in outdoor activities, and dynamically change the creative for households that care more about fuel efficiency for their daily commute. This level of relevancy is a game changer for auto brands, allowing them to maintain the impact that TV has always had on building their brands, while also ensuring that the viewer is seeing messaging that’s the most tailored to their real-time needs.”
The more that agencies lean in on accountability and strategic measurement, the more the publishers will do the same and create a richer ecosystem of insights and media plans. Everyone wins. The only organizations left behind will be those that aren’t keeping up with the benefits of addressability.
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As the director of ad-tech performance at Urban Science, Carl Matter thrives on the opportunity to bring people, technology, data and understanding together.
