Before They Spend On Addressable TV, Brands Must Decide What They Want To Accomplish

On TV And Video” is a column exploring opportunities and challenges in advanced TV and video. 

Today’s column is written by Paul Alfieri, chief marketing officer at Cadent.

Addressable TV advertising is gaining momentum, with total annual spend projected to exceed $3 billion, according to eMarketer. But like any emerging medium, the noise and hype can drown out the signal.

Before brands dedicate budget to addressable TV advertising this year, they should know which audiences they’re engaging, the types of insights they’d like to derive and the KPIs they want to drive.

In other words, brands must have a grasp on what their addressable TV media spend should accomplish as part of their overall marketing mix.

Are they engaging a national audience? 

Building brand awareness requires the largest scale possible. TV is the premier reach medium, and its sight, sound, motion and attentive audience are all important factors to building that relationship. TV ads command twice the active viewing of YouTube and 15 times the active viewing of Facebook, according to research from WARC. So naturally, marketers will benefit from drawing on the biggest pool of possibilities, even when targeting a specific segment. 

Some TV providers claim access to a national audience, but what they may mean is “national” within their owned footprint. That’s because they likely don’t have subscribers in every  designated market area in the United States. Even within their subscriber base, they may not have upgraded the set-top boxes of every subscriber to enable targeting at the household level.

At CES, many wireless providers, cable operators and over-the-top providers discussed next-generation upgrades to the home, but those rollouts will take years to cover a true national audience.

So while a brand may believe its potential total reach is the full 75 million US addressable households, in reality, the starting point is likely much smaller. When they begin segmenting audiences on top of that smaller pool, their addressable campaign might only ultimately reach a small percentage of targets.

As such, it’s important to investigate the math behind their plan’s audiences. Without this critical examination before their campaign runs, their results might be disappointing.

What are they learning?

 We are in an era where demographic insights are no longer acceptable as sum-total campaign results. Marketing organizations are shifting to analytics-driven planning, increasing business impact by constantly improving and learning through attribution and modeling.

Data-driven TV is an important part of this picture; campaigns today can leverage valuable data sets to provide in-flight feedback and detailed post-campaign observations about the changing habits of a brand’s target audience. Addressability in TV takes this even further; through a test vs. control methodology, advertisers can learn what messaging works and doesn’t work for specific segments or products.

Addressable can also help marketers better understand particular audience segments. For instance, a brand may learn through an addressable TV campaign that young single people may be optimal targets for driving incremental sales of its products or that targeting rural or suburban households can be more successful than urban households.

Insights like these should influence not just other TV buys, but also the larger digital media mix and marketing strategy. It’s time to start thinking of TV as a part of overall media spend and not a siloed awareness channel that can’t connect to real business impact.

While planning for addressable, brands should think about the types of insights they want to glean, such as the optimal frequency for a conversion or the incremental impact on sales lift.

What business are they driving?

Vibrant TV creative should be the center of any closed-loop brand-building campaign. But most importantly, marketers can now measure the return on advertising spend against specific business KPIs such as direct sales, shopping cart growth, awareness vs. the competition, share shift or foot traffic.

Advertisers and agencies must hold each other accountable to the right metrics. If all parties around the table aren’t aligned on business metrics, marketers won’t be able to show business impact from their TV spend. Campaigns should be constructed to deliver on moving the needle against a business need in the most efficient way, and as such, shouldn’t be optimized to qualitative metrics that wouldn’t hold up on a slide at a board meeting.

The cornerstone for all of these approaches is the marketer setting the tone and providing their agency and partners with a complete picture of their true business objective and encouraging analytical thinking. So as they greenlight their addressable TV advertising spend this year, brands must ensure that they know what their spend should accomplish.

Follow Cadent (@CadentTV) and AdExchanger (@adexchanger) on Twitter.

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