Addressable TV is TV advertising that is served at a household or a personal level to a specific audience rather than being broadcast to the entire viewing universe of a channel.
An example of this is Sky AdSmart where ads are served through the Sky box (replacing linear TV ads) to an audience that has been pre-defined. The audience is defined at a household level as there are likely to be multiple people within the household watching.
Another example of this is Channel 4’s Video on Demand (VoD) platform, All4, where ads are served to individuals based on their log-in details.
The Addressable TV Market
At a household level, Sky Adsmart dominates, although it only has 27% penetration of UK households. That is growing fast though through their partnership with Virgin which will grow their penetration to 40% later this year. By 2022, when Now TV and YouView will be on board, Sky are aiming for 60% penetration.
We also have Broadcaster Video on Demand (BVoD) opportunities available from the main broadcasters with varying degrees of penetration and different targeting variables and ad formats you can use:
- ITV Hub – 22 million subscribers
- All4 – 18 million subscribers
- My5, Sky On Demand and Sky Go – combined figure of 25 million subscribers
- Subscription Video on Demand (SVoD) services such as Netflix and Amazon Prime don’t carry advertising.
Pros and Cons
The main benefit of Addressable TV is that you can use data to target precisely and therefore reduce wastage. And there is a lot of good data available. For example, Sky can overlay their own first party data with third party data from sources such as Experian and Mastercard.
This means, if you are marketing a niche product such as a luxury holiday, you can serve ads only to households which include someone who has bought a luxury holiday on their Mastercard in the last year – i.e. you know they are more likely to be able to afford, and be in the market for, a luxury holiday.
That turns the whole notion of needing to achieve broad reach with TV on its head, because you can achieve a really high level of reach of your defined audience with Addressable TV.
There is a price premium for Addressable TV, but this is in effect counteracted by your message only being seen by the people you want it to be seen by, with no wastage.
If, however, you need to achieve a high level of reach of a broader audience, then it is likely you would need to use a combination of AdSmart and VoD to deliver that. You may then possibly encounter issues around differing levels of addressability (different platforms have different datasets) and attribution may become a problem.
When using AdSmart by itself, there are various ways you can attribute response to a camapign – either by looking at the uplift itself during the campaign, or by comparing those exposed to the AdSmart ads with those who weren’t and matching back sales from your database to the Sky AdSmart database.
This makes it easier to isolate the impact of AdSmart even if you have other channels, including VoD, running concurrently, but you do need a certain size of customer database in order to conduct the match-back analysis.
With TV ads that appear in VoD, clickthrough rates tend to be very low and bounce rates tend to be high. As with online display, you are unlikely to get much directly attributable response on a last click basis. The role of VoD needs to be viewed in a similar way to online display – i.e. as more of an awareness tool that you can use to reach specific audiences or to target by specific programmes or genres – and the impact of VoD therefore needs to be assessed in a different way.
The use of these different platforms will depend on your campaign objectives. If you are running performance TV and want to understand its direct impact, then AdSmart can be very effective. If you want to build incremental coverage of specific audiences that may be hard to reach through traditional Linear TV, then VoD can also be very effective.
For niche audiences, Addressable TV is already a truly fantastic opportunity for generating data-driven results and worthy of a test by any marketer who appreciates the power of audio-visual advertising and wants to understand the real ROI of their activity.
Addressable TV is growing in scale and there is a real focus in the industry on multi-platform measurement. With greater scale and greater understanding of how different platforms contribute to results, in time Addressable TV will become an important tool for marketers to reach a wider range of broader audiences.
At Edit we are passionate advocates of the power of TV to transform your business. If you would like to discuss addressable TV or any element of performance TV, please get in touch: [email protected]