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Make Way for Addressable Advertising: How CBS is Bringing DAI to Linear TV

July 31st, 2018   ||    by Melanie Brown

The media industry has seen a flurry of activity in the streaming content and addressable advertising spaces over the last few years, especially with the rise of OTT content and shifts in traditional television. National and local broadcast networks have dealt with a slow decline in ratings over the past few years, due to factors like fragmentation from time-shifted viewing, streaming services, and original content popping up all over the web.

According to a recent New York Times article, TV ad spending finally peaked in 2016 at $43 billion (the same year that digital spending, in its rocket-like rise, came up to meet it), and saw a drop of 2.2 percent in 2017. IPG’s media buying agency, Magna, projects traditional TV ad sales to decline by at least 2 percent annually through 2022.

Adding to this drop in media spend is the fact that the traditional TV audience is skewing older and older. According to the Times article, the top 10 shows on broadcast television this year had a median viewing age of 53.3 years old.

So what is traditional television to do? Take a page out of digital’s book.

As opposed to television’s media spend downward arc, the digital spending arc has trended upward since 2014. Much of this has to do with the increased amount of information available for targeting via digital mediums.

TV networks have not been ignoring the digital trends. In an effort to evolve with the media landscape, CBS recently announced a partnership with Nielsen to expand their addressable advertising capabilities. Many broadcasters and cable networks have announced accompanying “diginets” to their traditional channels that often broadcast original content, as well as streaming OTT services like CBSi that provide viewers with streaming CBS programming on-demand.

The increase in CBS’s digital portfolio has already led the broadcast marketplace in addressable advertising efforts. They’re now relying on Nielsen’s recently acquired Gracenote automated content recognition (ACR) platform to bring addressable Dynamic Ad Insertion (DAI) to linear television.

CBS’s move is a smart one in an age where cord-cutters and cord-nevers are also on the rise. Historically, brands have always wanted to reach the younger audience demographic, but more and more, millennials, Generation Z, and the like are turning to OTT and streaming platforms to view their content.

If broadcasters don’t get behind the digital trend quickly, they could find a sharp decrease in dollars spent on linear programming.

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