TV is becoming more addressable around the world.
GroupM is getting in on the trend with the expansion of its addressable TV business Finecast to Canada on Thursday as its first North American market.
Finecast was launched in the fall of 2017 in the United Kingdom to help buyers and sellers target audiences on linear TV as ratings declined. It opened its doors in Australia in October of 2018.
Addressable TV in the United Kingdom has flourished because the major cable operator, Sky TV, owns more than half of the market. In Australia, addressable TV became a bigger opportunity as broadcasters began availing more inventory through programmatic pipes.
And in Canada, major broadcasters, cable operators and telecom companies are vertically integrated, making addressable easier to pull off than in the United States, said Veerle De Lombaerde, SVP, Finecast.
“This is a nascent market, but broadcasters are welcoming the opportunity,” she said. “Those audiences are unique to their ecosystems and that’s quite powerful for them.”
Sensing the opportunity, Canadian media sellers have been investing in the technology to enable addressability on their inventory. Unlike the United Sates, where MVPDs hold the keys to addressability, Canadian broadcasters can make all of their linear supply addressable thanks to vertical integration.
“[Broadcasters] are developing almost walled gardens in TV,” said Stuart Garvie, CEO of GroupM Canada.
Finecast, a specialist group that supports GroupM’s agencies and clients, operates across those walled gardens by helping advertisers target audiences across linear, OTT and VOD inventory. Buys are made as a managed service.
Finecast will work with data from Mastercard and Environics Analytics, Canada’s “gold standard” for audience data, to target households at the postcode level.
“In the US, there are so many different data suppliers,” De Lombaerde said. “There isn’t someone who holds that gold standard in quite the same way. Having that brings [the ability to] holistically define a single audience across the entire Canadian population.”
GroupM plans to eventually roll out Finecast as a global solution. In the United States, it will have to figure out how Finecast works with Modi Media, GroupM’s addressable business in the market that specializes in working with MVPDs that sell local addressable inventory.
“There are significant differences in the way that television is distributed in Canada and the United States,” Garvie said. “We don’t have local inventory available from the MVPDs in Canada.”
Hang ups
Even in Canada, clients need a lot of education on how to incorporate addressable into their media plans.
“It very much plays a different role than linear TV,” De Lombaerde said. “It’s about recapturing incremental reach, advanced targeting and potentially activating first-party data.”
PII-based data is also more constrained in Canada, which has stricter privacy laws than the United States. Consumers have to explicitly opt-in to targeting with the broadcaster, meaning scale can be difficult to achieve.
And there are kinks to work out in reach and frequency management as Finecast operates across emerging walled gardens.
“There are inherent tracking challenges that come with that,” De Lombaerde said. “That’s very much a nascent piece.”
On the broadcaster side, rolling out targetable set-top boxes and creating addressable ad pods will take time. Canadian media companies are often more focused on big revenue drivers such as installing internet service than they are on addressable advertising, Garvie said.
Still, the promise of addressability is attracting brands in verticals like auto and QSR that activate on a local basis, as well as smaller brands who wouldn’t have had the TV budget to run a broad national TV buy.
“We’ve been talking about addressable TV in Canada for an awful long time,” Garvie said. “Finecast is hopefully going to be the impetus to get this moving.”
