Addressable TV from the media buyer’s perspective: What’s hype vs. reality

Addressable TV from the media buyer’s perspective: What’s hype vs. reality

Advertisers can target tens of millions of US households using third- and first-party data rather than buying in broad demographic strokes. It sounds great — especially to a digital marketer’s ear — but how much of the talk around advanced TV, an umbrella term (perhaps first coined by IPG’s Cadreon) for data-based TV buying on linear addressable TV, over-the-top (OTT), programmatic TV and more is reality-based, and how much is, well, still hype? That’s where TV came into play — let’s take the principles of data and automation to TV.” One big shift that is happening is that brands are thinking much more strategically about customer data. And for national broadcast spots, automation isn’t at all possible.” Addressability to households on providers like Dish Network, Cablevision and Comcast is more in the spirit of programmatic with the ability to do some optimizations in-flight. “In order to be more effective, we need to identify high-value audiences and use data sets to identify them cross-stream, including digital video, OTT, addressable linear, etc. It’s a holistic planning process using traditional TV planning and audience planning underpinned by data.” IPG has created an in-house data stack, called AMP, that’s designed to be a single platform to plan, buy, measure, and manage all advertising campaigns “whether your target audiences are viewing ads from set-top boxes or smartphones and complement traditional TV,” says Schmidt. And it will be a lot more accountable than if you hit your GRPs [gross rating points, a metric TV buyers use to determine how many people within a target demographic might have seen their ads].” With addressable linear TV in about half of US households, the addition of that plus OTT and digital video can “provide greater reach than with traditional linear only,” adds Schmidt. “You can use addressable to find incremental reach, increase frequency against a high-value audience, negatively target to exclude certain households (say, loyal competitor buyers), use multicultural household targeting — and that’s probably just half of the use cases,” says Laurenzo. Morgan says that at most 1 to 2 percent of TV ads are being managed this way. “It’s not going to replace linear TV in the near-term, but leveraging data we can now find out faster if a campaign was effective, and just as important, you can use those learnings across your media plan and roll that back into linear TV buys, such as insights into which networks are driving performance locally and back that in nationally.” For advertisers, says Wolf, “If you want a competitive advantage for core audiences, you can do that in addressable TV at scale.” Wolf speculates that we’ll start to see digital and addressable TV buying teams coming together more in the future.

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TV buying is entering the realm that digital marketers have long operated in. Advertisers can target tens of millions of US households using third- and first-party data rather than buying in broad demographic strokes. TV buys are also becoming programmatic, results no longer take months to get in, and campaigns can be optimized on the fly. That’s the promise of data-driven TV targeting.

It sounds great — especially to a digital marketer’s ear — but how much of the talk around advanced TV, an umbrella term (perhaps first coined by IPG’s Cadreon) for data-based TV buying on linear addressable TV, over-the-top (OTT), programmatic TV and more is reality-based, and how much is, well, still hype? (For a primer on some of the terminology and capabilities discussed here, see our FAQ: Addressable TV & the convergence of digital video and TV ad buying.)

We talked to media buyers, strategists and others in the space to find out what it’s really like on the buying side of advanced TV these days, not just what’s promised.

“Everybody in this ecosystem — platforms and supply partners — boast they have stuff they don’t,” said Erica Schmidt, EVP, managing director of Cadreon, IPG Mediabrand’s ad tech unit. Schmidt, who has a digital and search marketing background, says part of her job is to figure out what’s reality.

Data-driven sensibilities have taken hold

“We wanted to take the principles of data and automation and apply them to TV to find networks, programming and dayparts above the point of diminishing return that a linear TV plan will have and find ‘spots and dots’ that can extend reach,” says Schmidt of Cadreon’s entry into TV. “Anything that can be delivered programmatically, we believe should be. That’s where TV came into play — let’s take the principles of data and automation to TV.”

One big shift that is happening is that brands are thinking much more strategically about customer data.

“We are increasingly finding clients are taking data seriously and have gotten their ‘data house’ in order, including CRM and other digital programmatic signals that are now in place,” said Schmidt. “That gives them the opportunity to tie that data throughout the planning process.”

As data enters the realm of TV buying, it is taking on sensibilities already native to digital practitioners and strategists. One would assume digital marketers are well positioned to inform the trajectory of advanced TV in their organizations with the convergence of data-informed audience targeting with TV.

How digital-like is buying advanced TV?

In terms of data execution, addressable TV is quite similar. “You’re using data sources to identify and triangulate audiences,” says Tobias Wolf, executive director at GroupM’s Mindshare, who got his start with addressable TV 10 years ago in his previous role running the American Express US account. “The delivery is slightly different, but the planning is essentially the same as digital in identifying audience segments and delivering personalized messages to them. You can be running five targeted ads [in addressable] versus one in traditional TV.”

There are similarities in terms of accountability, too. “You can get direct match-backs to the household (anonymous) and provide ROI or ROAS, which has proved very effective,” says Wolf. “Particularly for [GroupM client] Volvo in terms of ROAS. If I’m in the market for a sedan and you’re in the market for an SUV, I’ll see a Volvo ad for an S60 and you’ll see an ad for an XC90. In programs we are watching, not what Volvo thinks we’re watching.”

In terms of the actual buying and activation processes, though, the level of targeting and automation depends on the type of delivery.

A linear addressable buy via an MVPD [multichannel video programming distributors, including cable operators and direct broadcast satelite] is currently the most common method targeting households with some sort of audience segment, says Anthony Laurenzo, SVP of non-linear strategy and investment at Dentsu Aegis Network (DAN). Laurenzo provides input across internal agency teams about opportunities for TV and video planning.

OTT buying on platforms like Sling, PlayStation Vue or Roku is slightly more complicated, says Laurenzo. Those buys can leverage subscriber data and can target households via connected TVs. Roku, for example, announced a licensing deal just this month to include its streaming services on Philips-branded smart televisions in the US. But says Schmidt, “OTT is more like digital video and has more flexibility in terms of on-the-fly optimizations.”

“With MVPDs, Schmidt says, “we can activate and send over insertion orders on an automated basis, but in reality they are manually engaging. And for national broadcast spots, automation isn’t at all possible.”

Addressability to households on providers like Dish Network, Cablevision and Comcast is more in the spirit of programmatic with the ability to do some optimizations in-flight. For example, Schmidt explains, if they’re doing a zone-addressable buy targeting in-market auto buyers and are able to see sales match-back rates quickly, they can make adjustments. But only by going to the addressable providers, and that still involves some back and forth.

Addressable is a complement to traditional TV, for now

For brands that already have a traditional TV strategy, addressable is seen as an add-on, with a look to extending reach and efficiency of a traditional linear TV plan.

“Eventually there’s a point of diminishing returns with broad demography targets,” says Schmidt. “In order to be more effective, we need to identify high-value audiences and use data sets to identify them cross-stream, including digital video, OTT, addressable linear, etc. It’s a holistic planning process using traditional TV planning and audience planning underpinned by data.”

IPG has created an in-house data stack, called AMP, that’s designed to be a…

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