Addressable TV Isn't On the Way; It's Arrived
The Golden Age of television advertising may just be arriving. More than 40 million households can be pinpointed with relevant TV spots.
Last year a national beverage brand sought to win back business from households with incomes in excess of $70,000 and kids ages 7 to 12. It purchased third-party data from a leading aggregator and matched it with first-party data from participating media companies to execute a highly targeted blitz. It scored big. Following the campaign, penetration within the target segment increased 38%, bringing with it a 21% sales lift. But it wasn't direct mail couponing or programmatic display advertising that accomplished this feat. It was television—addressable TV, to be precise.
The beverage brand was one of 100-plus Starcom Mediavest Group clients that contributed to $300 million worth of addressable ads placed by Publicis's huge media network last year. That's twice what it was the year before. SMG started looking at addressable TV a decade ago, introduced pilot programs in 2013, took it to the open market in 2014, and moved beyond tests into always-on flighting in 2015. The data flow and the set-top box technology had finally caught up to the desire for a more targeted approach to advertising on what still is the number one media channel (see table at left). Americans, on average, spend about four hours a day watching video content on TV versus only one hour on digital devices.
“It turns out that all things are not Nielsen and programmatic advertising,” says Tracey Scheppach, the EVP who runs SMG's Addressable Forefront. “We are doing addressable in 42 million households in the U.S. today, and several agencies are very involved in the market. TV is poised for a transformation like you've never seen. It's been stuck with Nielsen until this 42 million came along. We've greatly increased our ability to do one-to-one delivery.”
Here's how it works: An advertiser defines a target and provides customer data. The TV provider adds subscriber data and the files are sent to third-party “safe havens” (so called because they strip personally identifiable information) such as Acxiom or Experian for matching. The segment files are then returned to the TV companies. The number of those companies with set-top boxes equipped for the task is constantly growing, and now includes Cablevision, Comcast, DirectTV, Dish Network, and Verizon Fios.
“We've got 32,000 bits allocated to us in the set-top box. Any kind of data at all can be ingested and used to target viewers. We can identify anything you want. We can identify a left-handed juggling clown,” says Michael Kubin, EVP of media at Invidi, one of the chief technology platforms powering addressable TV. Invidi taps click-stream data, viewer patterns, Census data, ZIP+4, and even remote control usage to determine a viewer's age, gender, income, and location. Company literature claims to be able to “pick and choose TV viewers with the same accuracy as direct mail.”
Looking to become the Nielsens of the addressable TV age are third-party data providers such as Acxiom, which last month launched Acxiom TV and the Audience Interconnect platform to help clients pinpoint TV audience segments. The business unit grew out of Acxiom's December acquisition of Allant, a third-party TV data management company whose clients included Comcast and Dish. “TV is changing in a big way. It used to be an appliance that sat in your house and received one prefixed signal. Now it's about receiving video content through a device,” says Rick Erwin, president of Acxiom Audience Solutions. “The cable and satellite operators who operate those devices