Addressable TV Advertising is possible, profitable and easier than you think

Not too long ago, targeted advertising – tailoring advertising to a particular segment – across a TV platform was unthinkable.  

That was never the case with online streaming platforms and video distribution channels. They were built for targeted advertising from the get-go. And they embraced it for good reason; targeting viewers by preference, location, behaviour, or any number of other parameters meant that viewers were more likely to remember and respond to ad campaigns. 

Welcome to 2023. Today, targeted, or addressable, TV advertising is no longer a pipe dream. In fact, it’s growing in popularity, and according to a Forbes report, addressable TV advertising grew by a whopping 373% in the US market over the past five years.  

Addressable advertising leverages data-driven insights and cutting-edge solutions enabling TV service providers to deliver relevant ads to targeted segments of individuals and households. But before diving into the details, let’s take a bird’s-eye view of this game-changing technology for providers, advertisers, and viewers. 

What is addressable TV advertising? 

As our experts commented in the first episode of our webinar series on ‘Demystifying Addressable Advertising’, this one’s a biggie!  

TV is no longer just broadcast television. Viewers are consuming lots of different content via lots of different platforms (OTT, pay TV, and yes, even broadcast/linear) and on lots of different devices (mobile phones, tablets, and yes, even TVs). And they’re watching this content everywhere – on their own or with friends and families.  

With such across-the-board fragmentation, advertising is more challenging… yet potentially more profitable than ever. That’s because precisely targeting the right ad to the right people at the right time leads to greater awareness and adoption. 

How does addressable TV advertising work? 

By leveraging the plethora of data available, addressable TV ads ensure that viewers are exposed to relevant, impactful advertisements. Take, for example, a group of friends watching a live Champions League match. With addressable advertising, they’re likely to see ads of their favourite beer brand or pizza chain. A household with young children watching that same match, meanwhile, is more likely to see ads about a local amusement park or a recently released family movie. Here’s how these households are targeted with specific types of ads: 

1. The first step in implementing an addressable advertising system is to gather relevant data about your viewers. This data is collected from a variety of sources, including first-party information such as billing and platform analytics and third-party data such as content metadata and DMPs. Combining this data coherently helps create a comprehensive profile of your viewers’ demographics, habits, and preferences.  
2. The next step is to understand your inventory and your rights to insert or replace ads in the video content and services that you’re distributing. Only once you understand who you can reach and how you can reach them can you begin creating advertising offers and lining up demand. 

However, the best possible way to illustrate how addressable advertising works is with examples: 

#1: A fast-food chain that wants to promote a new signature menu available only at specific branches targets nearby households whose residents cover a particular age range. 

#2: A golf resort that wants to reach affluent males from across the country targets heavy male sports consumers and particularly those who frequently travel by air.  

#3: A retail store that is running a holiday promotion targets new customers living in a certain location who cover a particular age range. 

There are challenges you need to consider before venturing into addressable TV advertising. For example, there is the perception that targeted advertising is expensive. In addition, attribution and measurement fragmentation can be difficult if you’re looking to deploy across a diverse set of platforms. 

However, addressable TV advertising has shown that its benefits – the ability to unlock new revenue and attract new advertisers – far outweigh any accompanying technical and business challenges. 

Want to know what addressable TV advertising all is about, what are its challenges, benefits and if it fits your business? Watch this recording of the first session of our webinar series as our experts explain the true story about addressable advertising. And once you see we’re on target, register for our upcoming webinar session that promises to be your ‘Step-by-Step Guide to Addressable Advertising’.