It's a New Media Era - Addressable TV Ads

Jay Drummond // Nov 5 // Insights

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A question as old as time…what will the future look like?

Growing up, I figured by now it would look somewhat like that famous Hanna-Barbera television show the Jetsons. OK, I just dated myself. I’m sure many of you have never even heard of the Jetsons, which first aired back in the 60’s and has been syndicated across the years.

In short, it was about a family living in space, driving flying cars and pushing buttons that would provide whatever they needed instantaneously.

I sat in a research presentation, in the early 90’s, where they told tales about where they thought media would be in 20 years. They boldly predicted that television would become so targeted that programs and advertising would be designed specifically for me. They felt television would make the same type of quantum leap forward as the Jetsons had made from contemporary life.

Well it's here…almost.

Addressable television ads are moving higher up on the radar screen from the testing stage to implementation. Addressable television ads have been discussed and tested for years…and years. Essentially, cable and satellite television providers target specific homes with the use of third party data. This household targeting allows advertisers the ability to serve specific advertising messages to specific homes. For example, Allstate has tested targeting renter households with a specific renter insurance message.

As with all newer technology there are some pros and cons.

PROS:

  • The pros are that it puts the right message in front of the right predetermined consumer
  • More relevant placement means higher probability for action
  • In a 2009 test by cable provider Comcast, households with targeted advertising were 32% less likely to turn the channel during commercials—less channel switching means a higher probability for the target to actually see the ads

CONS:

  • Scalability is an issue—more cable providers need to adopt this platform but aging infrastructure is a roadblock
  • Advertisers will have to pay a premium for these spots as providers believe this targeted inventory is worth more than the average spot value
  • Oh yeah and there is this little issue of privacy that may also get in the way

Currently, the game is being played by those with the deepest pockets. The largest video providers are teaming up with the largest media buying companies who, in tandem with their massive media budget advertisers, are testing the viability of this proposition. Granted, those who are first in will understand it better and be able to use it more effectively but only a few can play in that game. Once this group lays the groundwork and develops scalable case studies then adoption into the mainstream will begin to take place.

I welcome this new era. It will happen, but not as fast as the prognosticators predict. However, when it does, there will be a quantum shift in the television advertising delivery system metric that would make George Jetson proud.

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