Buy 40 Reach in Linear then Addressable TV to Add 20-40 More Reach Points

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Cover image for  article: Buy 40 Reach in Linear then Addressable TV to Add 20-40 More Reach Points

This is a best practice because the cost of incremental reach over a 40% base is lower using addressable TV. At 40 reach, what you then do is target the people not reached yet (within the client defined target), which addressable TV can do. This is the way to get the highest reach in TV today, at the lowest cost, and with the fewest cases of excessive frequency – because the MVPD part of addressable TV excels at frequency capping, far more effectively than digital.

This and many other actionable, well-documented findings can be found in the new CIMM/GoAddressable Guidelines for Planning and Buying Addressable TV, put together by two of the most trusted consultancies in the business, Janus and Sequent. The consultants drew upon the vast data available from GoAddressable including a meta-analysis of 145 recent addressable TV campaigns, as well as best practices and data supplied by the 19 major companies interviewed.

This report captures industry learning driven by the pioneers in using addressable TV and shares it with all CIMM members. An advertiser or agency attempting to duplicate this learning would need to invest millions of working media dollars and at least a year or more of testing and would still fall short of the scale of the learning condensed in this landmark study.

When Next Century Media introduced addressable TV commercials in the 1990s, the main benefit we emphasized was the elimination of waste audiences for the buy side, resulting in a lower eCPM (CPM against the target), while the total revenue to the sell side would be increased by the overall average CPM being paid per 15 seconds going up. Both buy and sell sides win.

As shown in this new report, the win/win of addressability works whenever the target audience represents 45% or less of the total population. When the target is larger than that, it is less expensive to use linear than addressable. The smaller the target, the more advantageous it is to use addressable. In other words, it even works if you are targeting a smaller sex/age group. For example, males 18-24 are 9.4% of the population. However, current addressable campaigns are typically targeted to specific types of purchasers.

The report establishes that there are two main types of addressable TV in the U.S., the MVPD type and the CTV type. The MVPD type is available from individual MVPDs as well as combinations of MVPDs and through aggregators. The CTV type includes programmer-owned streaming services; independents such as Netflix, Crackle, and FAST channels: TV set manufacturers; and virtual MVPDs such as Sling TV, DIRECTV STREAM, YouTube, FUBO, or Hulu Live.

Another type of addressable TV that is not yet in broad use is when a linear network offers addressability through deals with the MVPD and/or CTV infrastructure. I first proposed this type in the 1990s as a way of increasing marketing productivity for the buy side while also increasing revenues and margins for the sell side. I proposed it again more recently as a way of re-establishing the profit growth of linear.

It is a common belief that the CTV type has a strong edge in terms of reaching younger people, but this report debunks that misperception.

  • Linear TV, delivered principally by MVPDs, reaches 22% of adults 18-49 exclusively. (CTV only 4 points higher in this measure six months ago, and that parameter has been shrinking since then)
  • and the total reach of linear TV is 74% against adults 18-49.

The study found that the two main types of addressable each have their own strengths. Importantly, if one uses addressable TV in conjunction with household level purchase tracking, the MVPDs have the edge over the CTV type, because MVPDs match by postal address, whereas CTV matches by IP address. In a quarterly campaign, the MVPDs still have 61% matchability by the end of the quarter, whereas for CTV it is only 24% matchability left after a quarter.

CTV on the other hand is perceived by the buy side as offering faster and easier (including programmatic) campaign starts and measurement reports, which can be near real time for CTV vs. "2-3 weeks for MVPD". However, GoAddressable members have now achieved turnaround time of less than a week.

Each type can improve by closing these gaps, which is easier said than done. There are no technical barriers, only costs to consider.

The amount of additional information in this report is considerable. We have only touched upon a few highlights. We strongly recommend you take a look at the report

Posted at MediaVillage through the Thought Leadership self-publishing platform.

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