Commentary
Where Does Advanced TV Advertising Fit In 2019?
- by Wayne Friedman , Staff Writer, December 27, 2018
The upside: addressable TV advertising has now achieved decent scale -- around 65 million homes out of a total of 120 U.S TV households. The downside: cost, accessibility, and some consistent data metrics remain.
Research shows the results are there. First, addressable advertising does eliminate a lot of waste. And that begs the second question: Will advertisers now spend, say, four times more CPM (cost per thousand viewers) in order to deliver advertising specifically to that better, targeted audience?
Even if that isn’t a hurdle, there are other concerns. That includes a number of different multichannel video program distributors sellers -- such as DirecTV, Dish Network, Comcast Corp. Charter Communications and Altice USA -- which can have different functionality when serving those ads.
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Here’s another: Different cable and satellite TV providers show that not all addressable homes are created equal, especially as it relates to specific consumer data preferences aligned in those homes.
In this regard, Open AP, a consortium of Viacom, Fox, Turner, NBCUniversal, and Univision, has intended to take a somewhat broader picture to easy entry. It wants to find new audience segments, maybe 100 or so, that can appeal to a wide range of TV marketers. It's not a perfect targeting of audiences, but reasonable.
Against all this is a recent survey of some 500 media-marketing senior executives (who spend $1 million or more in TV and digital video ad spending) by AT&T’s Xandr, its advanced advertising unit, which shows trepidation.
While 76% of media agencies and marketers believe media sellers efforts offering advanced TV advertising platforms is a good idea, 48% say it is “very difficult to fully fund my media budget in order to achieve my media strategy goals.”
Also, 44% say “my current media buying-planning infrastructure is dated and not up to the task of effectively operating in the new media landscape.” Marketers and media agencies are leery about which direction to go.
But one area where there is little uncertainty: digital.
Digital media has always been the strong link when it comes to return on media investment and key sales outcome performance. But TV advertising -- especially advanced advertising -- still carries a comfortable ease of operation and large-scale promise for intended customers.
When will marketers give addressable a bigger chance? Or will they give more dollars to digital?
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
All good questions Wayne. When it comes to evaluating linear TV vs Digtal media, I tend to think we are comparing apples to oranges. Digital excels at hyper targeting, highly accurate measurement and bottom of funnel results. Linear TV excels at branding and top of funnel audience awareness. What is currently happening in the advanced TV movement is an attempt to make TV more like digtial.
Addressable TV tries to reduce as many "wasted" impressions as possible, but it seems to only be relevant when a product has extrmely tight audience targets like high HH income as in the case of financial services or owning a dog (vs a cat) in the case of dog food.
The danger of trying too hard to make TV a hyper targeting medium is the loss of top of funnel awareness building. What if a person is about to become an auto intender because their lease expires in nine months. Will they show up on the current auto intender target list? Probably not if they haven't gone to Edmunds or CarGuru quite yet. So by targeting only auto intenders as defined by data platforms, advertisers will miss out on reaching a huge number of people who could be in their consideration set.
IMHO, broad based, linear TV should be an intregal part of the majority of advertising strategies. Maximizing reach at the top of the funnel is the key to driving bottom of funnel results. Let digital media be the complement to linear TV, not a substitute for it and leverage addressable and/or "advanced" TV as simply part of your TV mix.
In the majority of cases, trying to hyper target linear TV works against TV's strengths. Addressable TV will be great for some product categories, but everyone should remember that the smaller you make the target, the more you are putting a limit on your reach and potential sales. At the end of the day, TV is TV and digital is digtial. As addressable TV continues to grow, it should simply be a tactic within the overall TV strategy and come out of the TV budget.
Very good post, Long. I've been saying the same thing for some time now and more and more advertisers are beginning to see what we mean.
We at Decentrix do not believe this has to do with digital or linear as a technology, it’s simply the granularity within each platform you choose to make ads addressable. Brand building can be done on digital mediums as well, if not better than linear broadcast, so long as the folks that need to be aware hang out on the medium and the target has a wide enough reach. On the flip side, pin-point targeting can be more effective on a linear program schedule than a digital VOD play, so long as the audience is there. It's sometimes baffling to us why many folks feel this is a technology problem. We're the yield engine at Direct TV for DTV's cross media optimization, and linear addressable inventory is not a technical challenge from a granularity or optimization pov. Interesting article and comments all around!
Totolly agree Kenny (Good to hear from you!). It is definitley not about the technology, it's about the scale, efficiency and engagement that TV brings. This is all about advertising strategy and where to put your media dollars.
TV can't be beat for efficient reach and engagement. If an adversier wants to hyper target an addressable TV campaign, they should go right ahead. They just need to know that the more they hyper target a small group of consumers, the more they minimize their reach.
Obviously, for certain ad catagories that is a great strategy. For many, however, it does not make much sense.