What Is Addressable TV and What Does it Mean for Advertisers?

Consumer habits are constantly changing, which is why addressable TV is becoming more popular.

In today’s digital age, attention is scarce, and for brands to capture the interest of their consumers they need to provide them with relevant content.

At one time, brands would be quite happy to push out a single advert on a specific channel and capture 80% of the viewing audience. But that’s because there were only 3 or 4 channels available, so the attention of the consumer was a lot less divided.

Now, to achieve the same reach, you would have to push your ad out on hundreds of different channels.

On top of this, simply reaching a mass audience is not the best measurement of success.

After all, some of these people will not be your desired consumer so your content will not make the greatest impact.

But there is another, more targetted, more strategic way of reaching your target audience: Addressable TV.

In this post, we’re going to define exactly what addressable TV is, how it works, and ultimately what it means for advertisers so you can make sure you’re getting the best return on your investment.

What Is Addressable TV?

Addressable TV is the ability to target adverts to specific households on whatever device they might be watching on.

So, regardless of whether someone is watching TV on-demand, live streaming, or watching through linear viewing environments, they will see the relevant adverts.

Again, we’re using the word ‘relevant’ here as that concept is at the heart of addressable TV. Instead of a scattergun approach where you target the masses (which is suitable for some brands), you’re choosing which people see your advert based on certain characteristics.

Put simply, this means advertisers can segment households based on factors such as geography, behaviour, or general demographics.

This enables advertisers to improve their ad performance as the right people are seeing the right content.

And to make things even better, all data is monitored in real-time which means advertisers can tweak and adapt their campaign based on the results.

So, instead of just letting an advert run when it’s not generating any value, advertisers can act on the data and optimise their campaign to suit, whether that’s adapting the creative, audience strategy, budget, or a mix of all 3.

How Does Addressable TV Work?

With traditional TV advertising, advertisers would select a program or network to show their advert alongside such as ITV1 or Channel 4.

However, with addressable TV, advertisers select a household that they want to see their advert based on the factors mentioned above (geography, behaviour, demographics, interests, viewing habits etc).

The key driver behind addressable TV is data, as this ensures you’re reaching the right type of consumer with your content.

By segmenting your audience based on certain factors, you can keep your advertising efforts laser-focussed for maximum results.

For example, if someone has been scrolling through social media content relating to buying a new car, an automotive brand can run an advert suggesting a test drive at their local dealership.

It’s a much smarter approach, as you’re serving customers with the content they want.

But how do advertisers access the data?

Essentially marketers create a ‘household profile’ for consumers based on things such as their previously watched programmes, owned devices, visited websites, and cross-device behaviour.

They then pass this information over to advertisers, OTT providers, and cable operators so that households can be targeted with specific content.

Addressable TV vs Linear TV

Instead of seeing addressable TV as the end to traditional advertising, it should instead be viewed as an advanced way to buy your target audience (driven by data).

If you’re new to this format, you might have some questions about the differences between addressable TV and Linear TV.

That’s why we’re outlining the main differences below to help you better understand how these two formats work.

1. Linear TV advertising

First up is linear TV which is probably the type of TV advertising you’re most familiar with.

With this type of advertising model, you choose target age/gender across the entire linear landscape based on ratings for a certain show. For example, House persons with children.

Furthermore, traditional TV is also bought upfront, which forces advertisers to plan further ahead and not able to make quick changes.

The hope is that your ad will reach your intended target audience, which because of how wide you’re casting the net, can lead to some waste.

2. Addressable TV

In contrast, addressable TV allows advertisers to use data segments as well as age/gender, in order to purchase extremely specific audiences, instead of more generalised groups.

For instance, with addressable TV, you can purchase ads to be shown to females aged between 25-40, and mastercard spend data, such as, booked a holiday in the last 12 months.

This allows the viewer to receive more personalised ads with content that is better suited to their wants and needs.

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What Does Addressable TV Mean for Advertisers?

As the consumers’ demand for personalised content continues to grow, there’s no denying that addressable TV is here to stay.

According to Go Addressable, 41% of advertisers that aren’t using addressable TV plan to start using it next year, and 37% of users plan to increase their addressable spend in 2023.

This form of advertising also means less ad waste as you’re only showing certain ads to certain types of people.

This allows advertisers to better optimise their budget by focussing on consumers who are more likely to interact with their brand or make a purchase.

By focussing on specific segments of the population rather than the entire population, advertisers can manage their spend by doubling down on things that work instead of casting the net wide and hoping they see results.

Whilst addressable TV is not going to replace traditional TV anytime soon, it allows targeted advertising at scale across linear, live-streamed, BVOD, and ad-supported video-on-demand (AVOD) platforms, and to supplement your broadcaster offering.

Furthermore, addressable TV is an attractive option for newer or more niche brands who may have never previously considered TV advertising.

That’s because it provides more value due to the fact you can match a brand with it’s desired segmented audience which results in greater awareness and increased consumer spend.

As addressable TV continues to deliver data-driven channels to create targeted TV campaigns, more advertisers will use these types of solutions to explore the results that it can bring.

How You Can Advertise on Addressable TV

If you’re thinking about advertising on addressable TV, then there are a few things to consider first.

By keeping the below points in mind it will help you plan and execute your advertising campaign to achieve the best results.

Let’s kick things off with your goals and objectives.

Identify your objectives

The first step is to define your goals and objectives so you know what you’re trying to achieve with your TV advert.

For example, do you want to attract more leads, cross-sell some of your products, or push a particular product?

You also need to identify your maximum cost per acquisition as this helps you better manage your advertising budget.

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Define your target audience

Defining your target audience is key as you need to understand who you’re trying to target with your advert.

Without fully understanding who these people are, you can’t tailor your content to suit. You need to build up a picture of your ideal audience including their general demographics, the types of programmes they usually watch, what devices they use, and where they are located.

If you don’t already have this information, consider using third-party data providers.

Consider your creative assets

Now you need to think about your creative assets, which is the content you will be using in your TV advert to reach your audience.

There are a number of things to consider to make sure these assets are right, which we have detailed below:

  • Your ads should have a widescreen aspect ratio of 16:9
  • The bitrate of your video must be at least 5,000 kbps
  • You should create both 15 and 30-second ads
  • Make sure you include a call-to-action (CTA) in your ads

Plan your campaign

Your advertising campaign will depend on the size of your audience, the duration of your ad, and how often you plan to show it.

It will also depend on the parameters of the platform you choose, for example, lots of Demand Side Platforms (DSPs) offer a wealth of targeting options including geography, device, browser type, and demographic information.

Measure your performance

One of the best things about addressable TV is that it is data-driven.

By measuring the performance of different campaigns you can see how well different types of messages have resonated with your audience based on the action they have taken.

You can also monitor key metrics such as the number of views/clicks/interactions with the content, analysis of behaviour, and the reaction of viewers to different formats.

By being able to see the effectiveness of different ads at scale, it allows advertisers to adapt their content for specific audiences and devices.

It’s wise to give any TV advert around 30 days to see how viewers react.

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Should You Focus on Addressable TV or a Mass Market Approach?

The simplest answer to this question is that you should do both.

As we said earlier in the blog, addressable TV is not expected to replace traditional TV advertising any time soon, but the two should be used alongside one another.

Many TV companies are already allowing ads that run on digital VOD (video on demand) services to be bought and sold in real time, but there is a reluctance to open up linear TV to the same data-driven trading approach.

Take ITV, the UK’s largest commercial broadcaster as an example.

It recently launched an addressable ad platform called Planet V, but for now, brands will only be able to purchase ads to run on its VOD player, ITVX.

ITV’s managing director, commercial, Kelly Williams, agrees that the day will come when all ads will be “served” rather than “broadcast”, but expects this to be a longer-term transition.

The reality is that brands will need to find the right blend between linear, on-demand, and addressable TV depending on their campaign requirements.

This way, brands can use household targeting to extend their reach and increase their relevancy by making sure the right viewers see their ads.

What Is Addressable TV and What Does it Mean for Advertisers?

Addressable TV offers brands the opportunity to provide customers with targeted, more personalised content.

Now more than ever, consumers have such a vast amount of choice that it makes it difficult for brands to compete.There are simply so many channels for the viewer to choose from that it splits their attention and clouds their decision making process.

Gone are the days when there were a handful of channels to choose from which made it easier for your advert to make an impact. For brands to compete, they need to get their content seen by the right people wherever they may be, to really drive action.

If you don’t target your TV advertising to the right audience, you run the risk of wasting your budget on customers who have no intention of ever buying from you.

However with addressable TV, you can meticulously select who you want to see your advert to improve your ad performance and to achieve maximum engagement.

At the TV Agency, our team of experts ​will make sure the budget is used in the best way possible to create a successful campaign that maximises your return on investment. We’re more than just a typical agency, as we deal with each of our clients on an individual basis to create something you can truly be proud of.

If you’re new to TV advertising then it can be daunting! But you’ll be in safe hands when you partner with us as our team are well versed in the world of media buying, 2D & 3D animation, as well as live-action and CGI. So, not only do we do the fun stuff, but also the techy stuff and the legal bit as well.

Simply get in touch and leave the rest to us!

Written By

Anthony

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