“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
Addressable TV gives advertisers the ability to reach specific audiences at scale and with a level of precision historically not available in the linear TV market.
But despite the benefits, advertisers haven’t been taking advantage as much as one might imagine.
Although the supply side has been talking about addressable TV “for a long time,” the buy side is only “just starting to really embrace it conceptually,” said Larry Allen, VP and GM of addressable enablement at Comcast Advertising.
Why?
Because the juice isn’t always worth the squeeze. The introduction of more granular targeting opens the doors to hyper-targeting, which limits scale. Which is why, when it comes to audience targeting, addressable buyers should remember the adage, “Just because I can doesn’t mean I should,” Allen said.
Still, buy-side demand for addressability is starting to increase because better targeting can help solve for some of TV’s most enduring pain points, including frequency capping (or, rather, the lack thereof).
Allen spoke with AdExchanger.
AdExchanger: Does Comcast define addressable TV as just linear or both linear and streaming?
LARRY ALLEN: It’s both. Addressability comes down to targeting an audience and measuring reach across channels to manage frequency distribution and better determine return on ad spend.
But linear and digital media teams still operate separately for the most part, and programmatic execution is yet another budget allocation. These teams don’t really quite work together yet, and addressable TV has the potential to bring those workflows together because it’s audience-based buying, not channel-based.
What’s the difference between addressable and programmatic buying?
There’s overlap, but in most cases, there are two different workflows behind the scenes. The divide is really about who is matching audience and inventory together.
In a programmatic approach, the buy side applies their audience to the inventory they want within a DSP, and then they buy against that audience.
In addressable buying scenarios, it’s the sell side that’s applying audience targeting to its inventory, then making that inventory available for the demand side to buy, including programmatically.
But we’re starting to see more hybridization of the two models so buyers and sellers can more easily negotiate and agree on what needs to be included in an ad buy.
Why are previously hesitant TV buyers starting to do more addressable buying now?
Linear inventory is shrinking, which means buyers now have to make more out of the inventory that’s still left. Buyers can get better targeting and better measurement, including downstream metrics and KPIs that help them determine their return on investment.
Addressability can help buyers close the loop on measurement and attribution, which also helps solve for frequency capping.
What’s the biggest challenge of shifting linear TV advertising into an impression-based buying model?
If you asked me this question two years ago, I would have said plumbing. But the TV industry has made a lot of progress over the past two years with data interoperability.
The main challenge of converting media into addressable inventory isn’t technology but traditional legacy business rules around measuring impressions within a linear spot. Nielsen measurement as it stands, for example, can’t differentiate between a traditional linear ad spot and a linear addressable one. Nielsen ONE and other measurement providers are trying to solve for this issue.
But it’ll come down to buyers and sellers agreeing on a new measurement standard.
Will the adoption of addressable TV buying stall without an audience measurement standard?
I don’t think so, actually. Not in every case. Programmers just need to be more thoughtful about how they manage their inventory.
There are tactical executions of addressable that don’t have any impact at all on measurement. For example, I could sell a spot to one advertiser and then deliver different creatives against different audience segments. Using addressability as a tactic to carve up an ad spot intelligently with different messaging has everything to do with targeting and zero to do with measurement.
Is scale also an issue for buyers considering addressable?
Yes, although the industry has come a long way. We can reach as many as 100 million households by blending linear addressable with connected TV inventory.
Scale depends on a buyer’s tactical use of addressable. If you’re using addressable to reach a hyper-targeted audience, such as a specific ZIP code, for example, then there’s always going to be a scale problem. But you can also use addressable to target a broader audience segment like, say, men ages 18 to 49.
Wait – so addressable TV buying can include general demos?
Yes. Addressable TV is about targeting a household. When buyers target an addressable TV audience, what they’re really doing is targeting a household that includes the type of person they want to reach.
Age and gender is still a good audience for targeting because it has scale, and making addressable buys eliminates the waste.
Do certain types of TV buyers opt for addressability more than others?
The majority of addressable TV campaigns are national and regional buyers that typically buy within the two-or-so minutes of ad inventory that content distributors get from the publishers on their platforms.
National buyers especially are leaning into addressable because they can aggregate impressions across as many homes as possible across different inventory partners.
Then how exactly does data-driven linear (DDL) differ from addressable TV?
DDL can build reach very fast by indexing against an audience, which can be complementary to addressable. With addressable, an advertiser can manage frequency, prioritize cord-cutting or light-TV-viewing households and eliminate waste.
Addressability is like the next step past DDL, because buyers can manage reach and frequency at the household level – but you can’t do that with DDL alone. It’s actually most effective for buyers to plan a campaign using both DDL and addressable. That’s how they can best optimize inventory and performance.
Is there a wrong way to buy addressable TV?
I think buyers shouldn’t consider addressable TV only as a performance opportunity. It’s easy to get pigeonholed into hyper-targeting that way. Clients who are defining addressable audiences should always err on the side of being more inclusive rather than exclusive.
For brands, an incremental impression to a new household usually drives higher purchase intent than delivering more frequency to a household that’s already seen a particular ad. Buyers are more likely to reach an incremental household – and drive an incremental sale – when they don’t hyper-target an audience.
This interview has been edited and condensed.
For more articles featuring Larry Allen, click here.
