Seven things every CMO should know about addressable TV advertising
A view from Jakob Nielsen

Seven things every CMO should know about addressable TV advertising

It may seem like a niche way to advertise on TV, but addressable TV advertising with its pin-point targeted accuracy, is going to be a game-changer for the advertising industry, writes Finecast's chief executive.

Marketers know and love TV. In the UK, they’ve successfully used TV advertising to build brands for more than six decades. Despite media fragmentation, for many, it's still a favoured medium thanks to its engaged audiences and well understood ability to build brands.

But TV is changing fast, as we have explored in our recent The State of Video report which discusses the scale in technology and suitable inventory required to deliver "people", rather than "programme", focussed TV advertising. Marketers must understand how and why TV’s addressable powers are worthy of their love and respect.

I think there are seven reasons why addressable TV will make an already highly effective advertising medium even more compelling for brands, not just in the future, but right now:

1. On-demand content already attracts a huge audience

Ofcom data from 2016 shows 78% of British adults have watched, recorded TV or video on demand at least once in the past 12 months, and 30% have watched live TV online.

More than 8.3m UK households now subscribe to at least one SVOD service, with Netflix – the largest such service – reaching an estimated 6.5m households, according to Barb.

And by 2022, Mindshare’s recent Video Eats the World report predicts that 30% of audiovisual advertising – including online and time shifted TV – will be addressable by 2022.

2. Addressable TV advertising is an ecosystem encompassing multiple broadcasters, audiences and viewing opportunities

What defines successful addressable content is quality. The most popular on-demand video sources in the UK include BBC iPlayer (37%), ITV Hub (20%), All4 (18%) and My5 (10%). Newer on demand players such as Amazon and Netflix also understand this and are investing $4.5bn and $6.0bn, respectively, in content this year.

3. Addressable TV is transforming the way we plan TV advertising campaigns

We now have so much more data to access and can take a tailored approach to targeting consumers.

Marketers should think about and plan their campaigns differently – with precision advertising on TV being additive to broadcast advertising which creates general brand awareness and leads to greater market share.

Key considerations for addressable TV and new opportunities include:

  • taking a household data-driven approach;

  • utilising first-party data assets;

  • tailoring TV creative assets to discrete audience segments;

  • optimising campaigns in real-time with performance data;

  • measuring ROI in a fragmented world of non-linear TV delivery;

  • taking a data and technology-supported planning approach which is essential to managing the fragmentation challenge.

4. With viewability, brand safety and other concerns, many marketers are wary about digital video opportunities

Addressable TV advertising is as safe as, well, TV. Broadcasters not only create premium content for this space, but they also police it in the same way.

In the UK for example, Clearcast quality standards are applied not just on linear broadcasts but also across VOD platforms.

Addressable TV advertising combines the value of the big screen with more accurate household level targeting at scale. With access to highly accurate and trusted data segments, from socio-economic to life stage, behavioural and geographical data, it’s possible to build precise audience profiles and successfully reach them across major addressable platforms.

5. Addressable TV advertising goes beyond traditional live TV because it allows brands to link exposure to impact much more closely

The process of developing an addressable TV advertising campaign uses data to understand much more about who (or where) the message should be seen, brands have far greater ability to match exposure with action, be it purchases or brochure requests, and optimise in real-time.

For example, Finecast worked with a family travel/leisure provider, to run performance-led activity designed to build awareness, drive site visits and increase the number of holiday quotes. By optimising the direct-response video on the basis of arrivals to the client’s website, quotes, time of day, day of week and content, we were able to exceed our targets by more than 300%.

6. Addressable TV makes TV advertising more agile and accessible for more brands

Weather targeting for example, would allow a seasonal brand to use weather cues as a campaign activation trigger. On the other hand, geo-targeting would allow local brands to reach consumers specifically in the area they serve rather than UK-wide. This gives opportunities for smaller businesses to benefit from targeted TV advertising, which previously may have been cost-prohibitive and not an option to them. Sky claims 73% of the 1,130 advertisers that have used AdSmart are new to TV.

We think that addressable has a major role for many brands, even existing TV stalwarts, and estimate that between 30% and 50% of TV advertising could be shifted to targeted adspend. This could be in the form of more segmented messaging based on refined target audiences or a specific geographical focus.

7. Addressable TV offers substantial competitive advantage

At Finecast, we have clients who are very excited about how this new capability can transform their advertising campaigns. Those advertisers who experiment quickly and take advantage of the medium are benefitting from less ad clutter, greater share of voice and a way to reach audiences spending less and less time on traditional linear TV viewing.

Addressable is the new iteration of TV advertising and it’s finally here with meaningful scale across the marketplace. TV advertising is evolving and brands should embrace the opportunity, because now is the time to discover what addressable TV can do for your business.

Jakob Nielsen is chief executive at Finecast, Group M's addressable TV company 

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