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ITV recently said\u00a0that it plans to launch addressable TV within the next 12 months, enabling smaller and local businesses to target ads on a household-by-household basis. Its intention is to persuade smaller advertisers to divert some (or all) of their Facebook and Google ad budget to TV, with the promise of delivering more highly targeted and personalised advertising, which it says is data-driven, more accountable and measurable.<\/p>\n
What is addressable TV?<\/strong><\/p>\n The addressable TV ad opportunity is still being defined but it generally refers to ads being targeted at specific household audiences watching linear television.\u00a0Based on census data primarily, it allows for targeting based on income, ethnicity, children, home ownership and even car leases. The advertiser defines the audience it wants to target and pays for impressions irrespective of what that audience is watching at the time.<\/p>\n How TV broadcasters are able to deliver such advertising is still being experimented with, and the upcoming General Data Protection Regulation (GDPR) which comes into force next May is likely to add a new layer of complexity as IP address and postcode are generally used. In order to reach linear TV viewers, ITV for example is going to need to know who is watching what in real-time. This sort of information can really only be accessed from a set-top box, and ITV has said it will use an \u201camalgamation of different systems\u201d including the \u201cset-top box manufacturers, the TV manufacturers, the delivery systems that provide data plays for us\u201d. In the US, addressable TV tends to use a combination of\u00a0first-, second- and third-party data.<\/p>\n How popular is addressable TV advertising?<\/strong><\/p>\n Last year, addressable TV reached 42% of US households (approximately 49.8 million households), representing nearly $900 million in advertising spend, according to the Video Advertising Bureau. It’s on track to reach $2.2 billion in 2018, and its household penetration is predicted to rise to 74% of TV homes by 2020. However despite the impressive numbers, these are still quite modest figures compared with the\u00a0$71.29 billion that was spent on TV advertising in the US last year.<\/p>\n Within the UK, addressable TV advertising is not quite so mature. An eMarketer study last October that found only 4.1% of marketers in the UK either \u2018evaluated\u2019 or \u2018initiated\u2019 addressable TV to improve \u2018data-driven\u2019 advertising. However, as traditional TV moves to on-demand connected TV and connected TV expands from primarily subscription to primarily ad-funded, it seems very likely to grow in popularity.<\/p>\n The main challenge addressable TV will face is declining TV subscribers. Largely due to the improved selection of streaming services by Netflix and Amazon, for example, more and more customers are cutting the cord. In 2015,\u00a0385,000<\/a>\u00a0US customers decided to cancel their standard TV packages, and this figure is growing.<\/p>\n What are the main benefits for local advertisers?<\/strong><\/p>\n TV advertising, on the whole, has only been an option for big brands. However addressable TV cuts the wastage out of TV advertising for local advertisers particularly, who only want to reach a highly segmented audience. Also with fewer advertising dollars chasing the same ad inventory in TV, this could lead to more competitive prices within addressable TV, making it much more accessible to smaller businesses. Media companies with large addressable footprints can also provide their advertisers with more value through better planning and audience discovery, as well as TV execution and measurement.<\/p>\n \n Get exclusive insights into digital \n \n \n Stay Forward <\/h2>\n
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