Clients who are running performance TV campaigns often ask their agencies if they should be using addressable TV and VOD. They say, “it seems like a no brainer as you can use data to target precisely and reduce wastage”.
But what does a good agency say in response?
The difference between performance and addressable TV
Before we can answer that, it’s important to understand the typical process for planning and buying performance TV. We use data to test and learn, and we optimise using an attribution platform measuring low cost spots at a fixed time, and by buying airtime from sales houses with discrete inventory at discounted rates this makes TV one of most cost-effective mediums in terms of CPT, which in turn provides a favourable ROI.
By comparison addressable TV, including VOD, has a somewhat complex and muddled landscape and is not so easy to navigate or justify on a performance plan. Although promoted heavily, it lacks scale, the platforms have differing datasets which proves challenging, and the spots carry high premiums and are not completely attributable.
Looking at addressable TV in detail
So what do these differences mean for the client?
Looking at “complex landscape, lacking scale,” in the UK today 40% of households use Freeview to watch their TV (Source: BARB Establishment Survey Q2 2018) and this doesn’t allow for any degree of addressability, immediately reducing the addressable universe.
Within the addressable universe we have numerous platforms with different advertising opportunities, and some overlap between the sales offerings from the media owners.
The most well-known addressable TV product in the UK is Sky AdSmart which to date has the greatest number of targeting variables at a household level, however it only accounts for 26% of households. AdSmart is set to grow over the next 12 months by adding Virgin and Now TV customers to its addressable universe, but despite this increased penetration once you start overlaying targeting variables, the audiences often become very small, meaning it is hard to scale response.
We also have VOD opportunities available from the main broadcasters with varying degrees of addressability. Moreover, they base their understanding of their audience, on how people behave while signed in rather than on their whole viewing repertoire. And then to further confuse matters, we find that how people are accessing the same spot will affect who is selling it, and how much the advertiser is charged, as demonstrated below:
|Spot X being watched via platform VOD||Audience watching ITV Hub on their TV with a Sky+ HD box||Individual user watching on a tablet via SkyGo||This is sold by Sky|
|Spot X being watched via broadcaster VOD||Audience watching ITV Hub on a Youview Box||Individual user watching on a mobile through the ITV Hub app||This is sold by ITV|
It’s all about the platform
Different platforms mean numerous data sets – owing to the varying degrees of addressability, it is hard to reach a uniform or highly-defined audience.
Moving forward media buyers are going to gravitate towards platforms that can deliver both scale and targeting. Currently this would be AdSmart but now we have Amazon coming into the landscape at pace, increasing its penetration, adding in transactional data as an extra targeting variable, which will inevitably could be a more attractive proposition.
When looking at spots which carry a premium but are not attributable – it’s understandable that there is an inherent premium in reaching very tightly defined target audiences, but because the platform owners do not supply post-campaign spot schedules, showing when the spots aired, we cannot attribute response to individual spots using attribution software. This makes it impossible to calculate whether the premium is worth it, which generally leads to planners deciding not to use them for pure performance TV.
You can evaluate addressable TV by looking at uplift from a discrete campaign or on a regional level, but it can be rather difficult to define the ROI if any other channels are running at the same time.
What do we need to move forward?
For addressable to work for performance campaigns it requires several developments in the marketplace:
- a range of suppliers with a minimum level of addressability, so Freeview can work together with a data-matching partner to create audiences
- greater penetration of the technology that can serve the ads, so it can be delivered at a household level at scale
- a way of generating performance data in relation to individual spots to show whether the cost stacks up or not
When all of this is available addressable TV opens up a truly fantastic opportunity for generating data-driven results. Until then our response to clients would be: “it’s not accountable enough at this stage for performance campaigns.”
At Edit we are passionate advocates of the power of TV to transform your business. If you would like to discuss this or any element of performance TV further please get in touch [email protected]