Do you sometimes feel like TV advertisements are talking directly to you? In today’s advertising landscape that may, in fact, be the case. Addressable TV gives advertisers the ability to define an audience based on data and serve different ads to that particular audience regardless of the program they are watching.
CEOs are constantly thinking of how to better deliver their messages while personalizing the user experience, and this holds true in TV. The old days of the whole family sitting down in front of the TV to watch a program are numbered to a few big events during the year. The new reality is for different household members to watch different programs at different times on different devices. And brands are struggling to segment those individuals. In fact, desktop and mobile ad revenue surpassed TV for the first time last year. According to a recent article published in Adweek, TV ad spend is predicted to decline by half a percent in 2018 to $69.87 billion while digital advertising is expected to grow by 18.7 percent this year to $107.3 billion.
The reason? TV advertising is perceived to be less relevant, less measurable and less effective than its digital counterparts. But in an age where brands need to leverage every channel to build meaningful interactions with people, TV is not being left by the wayside. Brands need to adopt and implement the digital mindset into their TV campaigns. That means using data and technology to make better marketing decisions and create more personalized messages that resonate with the target audience.
We’ve all been there. We tune into ABC’s Scandal on Thursdays, only to spend 25 percent of the time watching commercials—most of which are irrelevant to us. But what if during that hour, we saw fewer but more relevant commercials?
For example what if, as an environmentally conscious professional who has two sons that enjoy outdoor activities and a wife who would love to go on vacation, I only saw commercials for a sporting goods store, a hybrid car and an all-inclusive Caribbean resort. But my next-door neighbor who just had her first baby, works from home and has a luxury shoe obsession saw commercials for diapers, a high-speed internet provider and a local shoe warehouse. Is that even possible?
Addressable TV gives advertisers the ability to define an audience, based on purchase history, subscriber demographics, behavioral data, third-party data, etc., and serves different ads to different audiences, regardless of the program they are watching. This allows brands to combine the massive reach of TV with digital-style targeting. This type of advertising means you and your neighbor could be watching Scandal at the same exact time, using the same exact cable television provider, and see completely different ads.
Just as people are changing the way they consume TV, it’s time for the television advertising industry to get smarter and allow brands and agencies to change the way they advertise via broadcast channels. Digital advertising has evolved over the last decade, becoming smarter, data-driven and more personalized. Now TV is catching up and helping brands deliver the same level of relevancy and have a more meaningful conversation with their audiences. And it’s a win-win for both advertisers and consumers. Advertisers can reduce wasted TV ad spend and better reach their intended audience while consumers will have a more pleasant viewing experience, receiving a higher rate of commercials that matter to them.
Find the perfect audience
The key is balancing the right level of granularity without sacrificing scale. For example, let’s say an advertiser wants to target women between 35–45 years old, who have full-time jobs, at least two school-aged children, lease a vehicle that costs more than $50,000 and have taken at least one vacation to Mexico in the last six months. Chances are your audience pool is small, but if we remove a variable, the audience pool will grow.
The beauty of addressable advertising is that brands and agencies have an opportunity to test and revise until they’ve found the perfect balance, finding the right strategy for people to better associate and connect with the brand. At Experian, we typically recommend to our clients that a target audience should be between 15 and 30 percent of the overall media provider audience.
Better measure ROI
With addressable TV, there is also the opportunity to prove ROI. Addressable TV provides advertisers an opportunity to better attribute results. Like traditional direct marketers, Experian helps addressable TV advertisers connect transactional data to specific campaigns, ultimately understanding the true return on ad spend. We see this as a big trend using ROI analysis instead of viewing counts to determine the success of TV campaigns.
Take your TV ad to multiple channels
As an industry, we’ve moved away from channel-specific campaigns. Undoubtedly, any campaign that an advertiser rolls out needs to have a strategy that targets the customer no matter what they are consuming. Advertisers and agencies can now pair their addressable TV strategy with mobile, digital and even direct mail, allowing them to tell a more consistent story to a highly-targeted audience.
Currently, addressable advertising is available in 63 million households, which is over half of all TV households. This number continues to grow rapidly, and advertisers can start taking advantage of this more targeted approach immediately. Once you have defined your data points and started creating potential audiences, you need to work with a third-party who has relationships with media providers to execute your addressable campaign. In addition, you or your agency will work directly with household-level addressable advertising media providers to negotiate the media-buy details and purchase their allocated addressable media inventory. You’ll be ready to begin your addressable journey and deliver a TV spend that is accountable and insightful.
Advertising has evolved tremendously, but the TV ad industry has been slow to adopt change—but things are changing. Addressable TV is the future of TV advertising, and the FCC’s recent ruling on next-gen TV or ATSC 3.0 allows for more precise targeting on local TV stations and is one of the next steps of the technology moving forward. For decades, marketers have been planning and buying their TV ads based on very basic demographics. However, try taking some of your existing TV budget and allocate it to addressable advertising. You can test and revise until you find the right audience and the right messages. By taking a data-driven strategy across channels, including TV, marketers can make more informed marketing decisions, create personalized experiences and have more meaningful interactions with audiences.