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The Future of Addressable TV Is Here. Are You Ready?

October 4th, 2019   ||    by Oriana Schwindt

The future of addressable TV is looking quite bright. Addressable TV spend is set to shoot up to $3.3 billion by 2020, an increase of 343 percent from 2016, according to MarTech Series.

And yet only 15 percent of advertisers are currently taking advantage of addressable inventory, even as more ad sellers are offering more of this kind of inventory, MarTech Series noted.

As digital and TV advertising continue to converge, many buyers still have questions—around addressable TV, in particular. We’ve got answers to the most common ones.

What Technical Advances Are on the Horizon?

An industry consortium created Project OAR (Open Addressable Ready) earlier in 2019 to establish a standard for this kind of advertising. The consortium includes Disney, CBS, WarnerMedia, and TV manufacturer Vizio.

“TV programmers reach a massive and passionate audience, but have lacked the precision targeting of digital. Through OAR, CBS will combine relevance with our reach to deliver a better experience to our viewers and better ROI [return on investment] for our advertisers,” Mike Dean, CBS’s SVP of advanced advertising and automation told Variety.

Nielsen has also created its own addressable TV division, Nielsen Advanced Video Advertising, according to Variety.

What About Privacy?

This is a big one. Vizio recently settled a class-action lawsuit that accused the company of distributing data from its TV sets without its customers’ knowledge for $17 million, according to MediaPost.

Another condition of the settlement was that Vizio would notify customers via their TV screens that they were able to opt out of data collection.

Interestingly, when explicitly given the ability to opt in or out, 90 percent of Vizio’s customers opted in, according to Digiday. This shows that consumers care as much about transparency as privacy.

How Does Programmatic Buying Fit In?

Programmatic is an automated way to buy ads—ideally, making it much easier to execute an addressable campaign. “Addressable” refers to the audience.

An addressable audience is far more targeted than your usual linear TV buy; ads are addressed to a specific audience segment rather than bought by a daypart or demographic.

As programmatic TV buying platforms get more sophisticated and become more commonly used, they are proving to be the perfect ally of addressability, enabling complex audience targeting and promising far greater efficiency.

Both of these elements of TV ad buying—addressability and programmatic—are having quite a moment, as Alan Wolk explained.

What Makes a Good Addressable Campaign?

It would be a bit of a waste to simply show your regular creative to this very targeted audience you’ve selected. At the same time, you’re probably working with budgetary restrictions.

The key is to be selective, tweak creative when you can, and find the balance in frequency that piques a viewer’s interest but doesn’t result in attention fatigue (i.e., seeing the same ad back-to-back multiple times).

The results of a well-executed addressable campaign are impressive. When Gulf States Toyota, a private auto distributor with 157 dealerships in the US, wanted to increase foot traffic at their dealership, they turned to an addressable campaign, according to Experian.

Using Experian’s data, Gulf States Toyota identified an audience that was in the market for a new vehicle and ensured that audience saw their ads more frequently.

The campaign resulted in a 19 percent lift in incremental visits to Gulf States Toyota’s dealerships.

The future of addressable TV is looking very healthy indeed. The time to start planning for this future is now.

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