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InContext / An inside look at the business of digital content

How to build the house of addressable TV

June 1, 2020 | By Virginie Dremeaux, Executive Director, Product and Sales Marketing Intl – FreeWheel @virginiedremeau

Houses are built differently across the globe, designed to local customs and to suit individual owners. But the basic structural elements are the same. Every house needs a foundation, a floor, walls and a roof. The same is true of addressable TV. It requires four essential building blocks, ideally assembled by the people with the knowledge and toolkit to create a sustainable structure.     

By making linear TV addressable, advertisers can enjoy the best of both the TV and digital worlds. They can combine the reach and high engagement levels of TV with the in-depth insights and targeting capabilities of digital. This enables them to deliver a relevant and engaging experience tailored to individual households. A five-year Sky Media study reveals the impact and resonance of addressable, finding it boosts TV ad engagement by more than a third and cuts channel switching by half.

But as these two worlds come together – the complex world of digital and the long-established world of TV – there will inevitably be challenges and complications to overcome. These challenges aren’t just technical, in fact ongoing technological innovation is continually making addressable inventory quicker and simpler to buy. Building the house of addressable TV requires something more sophisticated than a technical solution, it requires the following four building blocks, each with a theme of unification.      

Block one: Unified ecosystem

Collaboration across the entire ecosystem is vital to provide a sustainable structure for addressable TV. And everyone has their individual part to play. Broadcasters are the keepers of the user experience and the holders of the premium content brands are advertising around, while operators are the ones with the customer data to create and empower relevant targeting. Broadcasters and operators are already working together and getting ready for addressable. In the UK, for instance, Sky and Channel 4 formed a partnership last year enabling Channel 4 to use Sky’s AdSmart technology to deliver fully-targeted, addressable ads across its linear channels.

But broadcasters and operators on their own aren’t enough. Tech partners are crucial, from data management partners and measurement providers to ad servers. No amount of endpoints will bring the sophistication needed in ad decisioning without the right technology to underpin the process. To build a solid structure for addressable all parties must commit to relevant partnerships and share knowledge, rather than prioritizing competitive advantage.

Measurement is undoubtedly a big challenge when it comes to the broader adoption of addressable solutions by the TV networks. Addressable impressions are allocated from TV’s overall audience and additional value derived from selling an addressable campaign is linked to the ability to “adjust” the underlying linear rating.

To solve this, third-party measurement firms will be needed to build fair methodology for addressable endpoints. They will also need the operators and technology firms that enable these ad insertions to provide them access to addressable ad impressions.

Block two: Unified view

The second building block in the house of addressable TV is a unified audience view. Addressable allows transactions to cross the border between linear and digital with ease. Ultimately advertisers won’t buy linear or digital inventory, they’ll just buy great TV content across a single, converged and integrated platform. And it doesn’t stop at TV; insight across TV, mobile, and all connected devices will help advertisers gain a more granular and strategic understanding when reaching audiences. 

This sounds like an idyllic situation, with a single view meaning unified audiences and easier decision-making that will improve campaign performance and simplify everyday processes. But changing the model in this way is a big shift for the entire industry, and agencies, advertisers, broadcasters and operators each need time to prepare for this currency change. The industry will need to establish standardized values for touchpoints across digital and TV, meaning that everyone needs to be onboard to make a unified view successful.

Block three: Unified reach

The next component of a successful addressable TV framework is unified reach. Targeting linear TV audiences today is well-refined guesswork, but with addressable there is no need to guess anymore, and probabilities become a thing of the past. Data-led decisioning ensures ads are delivered to the right audiences while they are watching the TV screen, regardless of programming or time of day. Addressable will become a powerful complement to the existing mass distribution approach of linear TV, as it can be delivered alongside traditional ads within the multiple slots of each commercial break.

Advertisers who do embrace addressable should apply caution around over targeting. Just because brands know who they’re advertising to doesn’t mean they should target that individual with the same ad over and over again. Advertisers must be shrewd with addressability. They need to go beyond a generic message with nationwide appeal but avoid the over targeting trap digital display occasionally falls into. Brands should use unified reach with creativity, becoming storytellers to their audiences.        

Block four: Unified reporting

Last but not least, the house of addressable TV needs unified reporting. From broadcasters and operators to agencies and advertisers, all parties need to be saying the same thing and singing from the same song sheet. The other building blocks are less effective if the ecosystem doesn’t report in a standardised and transparent format. 

Reporting has been one of the biggest successes of linear TV. Ratings provide a gold standard that everyone understands, so addressable advertising needs to embrace that standard, marrying the qualities of linear and digital and the granularity of data from both worlds. There will inevitably be debate around collection methods but the most important thing is everyone reports in the same way. Standardised, transparent post-campaign reporting for each audience segment will help to drive adoption of addressable.

Addressable TV advertising has many benefits. But making it work for everyone – regardless of the design of their house – requires more than just a technical solution. By putting in place the four vital building blocks of unified ecosystem, unified view, unified reach and unified reporting, the industry can embrace the best of linear and digital, and assemble a strong, sustainable structure for addressable TV.     

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