Not that long ago, cable system and satellite operators shared a mindset of addressable advertising as just a better, effective revenue-producing way to use the two or three minutes an hour set aside for local messages by a variety of linear basic cable channels. Now that many linear basic channels allow operators the ability to sell addressable commercials during national ad breaks (around 14-18 minutes per hour), those addressable ambitions are rising as this Upfront/NewFront sales season gets underway.
A major factor behind the shift is Go Addressable, an informal consortium launched more than two years ago to educate the ad industry on the benefits of addressable campaigns. What started as monthly meetings became an incorporated trade association with a full-time staff, led by Board Chair Larry Allen (pictured above). "We are focused on helping the marketplace understand the value of addressable," Allen explains. "What we're trying to do is drive more usage, how advertisers put more dollars to work into having addressable be more efficient and reach their customers without oversaturation. We also want to enable brands to get the maximum benefit from a performance perspective."
At the moment, Go Addressable's corporate backers consist of Comcast Advertising, Charter's Spectrum Reach sales unit, a4 advertising, DirecTV, Dish Network and Paramount. A number of other operators and programmers are exploring membership in the organization.
A few weeks ago, Go Addressable released "Guidelines For Planning and Buying Addressable TV Advertising" a report on the state of this marketplace prepared in association with the Coalition For Innovative Media Measurement (CIMM). Based on conversations with top advertising and agency officials, the report suggests that 75 percent of all advertisers will place addressable campaigns in some form or fashion this year, representing all the major product categories. "We're starting from the realization there's a lot of adoption and people are engaged," Allen replies.
The report also contains five key takeaways on how well addressable campaigns can perform -- on linear cable channels as well as on other ad-supported services reaching viewers through smart TV sets and devices.
- Addressable campaigns consistently deliver 40 percent more reach than non-addressable campaigns.
- Campaigns pick up incremental reach, no matter the size of the brand or advertiser.
- Cost-per-minute rates end up more efficient.
- Addressable campaigns are more precise in landing target audiences via postal address than IP address (95 percent of households are matched via postal addresses, versus 60 percent through IP addresses)
- Addressable campaigns can be an effective complement with smart TV sets/devices in reaching adults 18-35
"By and large, the marketplace thinks that if they want to reach a younger audience, you should just buy time on connected TVs, and that couldn't be further from the truth," adds Allen. "You can't just isolate connected TV, because if you do, you'll miss a big chunk of your viewers, as well as opportunity to impress them with your brand message."
Amid all the adoption Go Addressable is privy to, Allen acknowledges that there are some issues holding many advertisers back from jumping full throttle into addressable campaigns. One is confusion about addressable as opposed to programmatic buys. "Some people think about programmatic and addressable in the same way" he elaborates. "Programmatic is a sales channel that activates demand, a way buyers and sellers exchange the dollars and expose deal mechanics. Addressability is the ability to match a client's target audience to a household within inventory that can be authorized."
Another issue Go Addressable wants to tackle is generating an addressable marketplace for Spanish-language advertising. In order to generate a robust environment, campaigns must do a better job segmenting Spanish-speaking households and catering to that demographic's sensitivities.
"The nuance there is to make sure people activating those campaigns are being responsible with regards to personal information," Allen says. "You have to keep that in mind. The challenge is upstream of the executive, and making sure the segmentation data is representative of that marketplace. There's a lot of work that has to be done."
For this Upfront/NewFront sales season, Go Addressable will issue additional blog posts, webinars, and meetings for advertisers and agencies, elaborating on the five takeaways from their initial report. Allen also expects to budget time with research agencies on how to track the effectiveness of addressable messages to boost product sales and brand awareness. "If you're able to map out that data in safe, aggregate privacy ways, you get a very accurate view of performance outcomes," he believes. "We think addressable ads can give you a true picture of not only reach and frequency, but performance against that campaign with regard to sales lift or brand lift."
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