Can Addressable Advertising Make TV Competitive with Digital?

The death of TV has been foretold many times over the last few years. It seems not a week goes by without someone declaring traditional media formats like newspapers, radio, and television are destined to fade away and be replaced by a completely digital ecosystem.

The argument is based on the premise that old fashioned platforms simply can’t satisfy needs of the 24/7, on-demand lifestyle we live today—and that’s just from the consumer side of things.

“Adding more nuanced targeting eliminates wastage, drives engagement, and enhances the overall effectiveness of an advertising campaign.”

Advertisers and brands are also moving rapidly towards a bright digital future. It’s not just because that’s where the audience is going – the tools for targeting and analytics are perfect for marketing, making ads much more effective at getting messages across to audiences.

Old Media Learns New Tricks

Don’t count out TV just yet. Television is getting some of its own upgrades, and they have the potential to close the digital gap and stave off extinction for a little while longer. One of the hottest new developments on that front is addressable advertising, a technology that enables advertisers to serve different ads to several audience segments that are watching the same program.

 “Addressable TV can help you serve your message to the best qualified households virtually each time—instead of leaving that to chance.”

That means that a Millennial away at college and their Baby Boomer parents back home might be watching the same top-rated sitcom every week and see entirely different ads. When mom and dad are learning about the latest cholesterol medication, junior is seeing an entry-level sedan tearing through a mountain pass.

Segmentation for addressable advertising can occur according to demographics (e.g. age, income, education, sex), psychographics (values, lifestyle, interests), or due to behavioral data (e.g. purchase history, online activity). The ultimate goal, however, is to target ads only to consumers who might be receptive to it.

A highly granular level of targeting isn’t right for every application. Major events like the Super Bowl or the Academy Awards are still about mass reach and broad messages that can appeal to the widest possible audience. Yet, for a great number of programs, adding more nuanced targeting eliminates wastage, drives engagement, and enhances the overall effectiveness of an advertising campaign.

The Shape of Things to Come

The recent news of AT&T’s approved acquisition of Time Warner is being seen, in part, as a continuation of a broader plan to infuse new media with old. AT&T bought DirecTV back in 2015, giving it access to the largest share of addressable-enabled, domestic households, at 15 million. There are currently 60 million such households in the U.S., and this latest merger, should it be consummated, is big step towards getting access to more of them.

Randall Stephenson, AT&T’s CEO, has stated emphatically that making TV advertising more precise will be crucial if the company expects to compete against digital natives like Google and Facebook. AT&T’s AdWorks division, which is focused on delivering that objective, claims that  “Addressable TV can help you serve your message to the best qualified households virtually each time—instead of leaving that to chance.”

Another old media giant, CBS, recently partnered with Nielsen to improve their addressable capabilities. “As TV becomes more digitally delivered, Nielsen is on the forefront of innovation in bringing our clients unique capabilities that will continue to drive the value of advertising on television,” said Peter Bradbury, an Executive VP at Nielsen.

Upgrading traditional media formats with cutting edge targeting tools is clearly the way of the future. According to researchers at eMarketer, spending on targeting ads will top $3 billion by 2019. Traditional media’s days might still be numbered, but addressable advertising looks to extend TVs tenure a bit longer.