Jun 06 '17

Addressable Television: How Technology Is Improving TV Advertising

As technology continues to propel society forward, advertisers have the opportunity to leverage technological advances in their traditional advertising to better reach core prospects. Such is the case with addressable television.

Addressable TV allows marketers to target with the same precision as online advertising and direct mail alleviating the targeting limitations of traditional TV buying. Typically when buying traditional TV ads, targeting is based on how networks index against key demographic traits such as age, gender and income. While the probability of reaching your core prospect is high, there is a massive amount of wasted impressions.

Addressable TV flips the script and, by leveraging third party data, allows advertisers to target households based on the specific demographic and behavioral characteristics. Not only does addressable TV eliminate waste, but it also enhances reach by allowing for behavioral characteristics to be targeted as well – something that was previously only attainable with digital advertising or direct mail.

Advertisers can also leverage their own data to target individuals who performed a key action, such as opting out of an email list or recently ending a recurring service. Plus, advertisers can use an addressable campaign to tailor their message and creative specific to the key traits of the audience. For example, a car manufacturer can run two different TV ads to truck owners and compact car owners, providing imagery and messaging that resonates with the respective characteristics of each audience and engaging them with a more personalized message.

After running an addressable TV campaign, advertisers can work with vendor and third party data aggregators to compare CRM data to exposure data (individuals having been exposed to media) in order to determine, not only if the campaign was effective, but also quantify the overall impact by comparing performance to a similar group that was not exposed to any addressable media.

In addition to matching first party data to the exposure data, advertisers can make use of the impression data from the addressable TV vendor to get a snapshot of the optimal networks or programs to reach the target audience. By analyzing this information, the data can either affirm the network targeting being used in a traditional TV buy or provide insight into untapped networks which can further enhance advertising campaigns.

Finding the right partner for an addressable TV campaign is a key component for success. Each vendor will have different segmentations, impression availability (based on their demographics) and associated costs. Cronin works with multiple addressable media partners to ensure we can build the right campaign to meet our clients’ goals.

The higher quality impressions gained from addressable TV does come at a higher cost than traditional TV. When working in an addressable campaign, it’s crucial to understand if the return on investment outweighs the increased cost compared to a traditional strategy. Not every campaign will be successful, but each can be beneficial by applying the learnings from one to the next. Including or excluding a specific trait or characteristic from an earlier test campaign can have a huge impact on the results of a future addressable campaign.

In a time when technology is moving fast, advertisers need to be faster. According to Starcom MediaVest Group, there were approximately 49.8 million addressable TV households in 2016, representing just about half of all households with paid TV services. With addressable TV spend doubling from the prior year in both 2015 and 2016, the number of addressable households will only continue to grow.1

Addressable TV is just one example of technology changing the media landscape. Be sure you have the right agency partner to navigate the increasing amounts of information and options.

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