How Fast is Addressable TV Advertising Growing?
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Tim Siglin: If your organization is thinking about doing dynamic ad insertion for addressable TV, targeted advertising, what's the timeframe? On this one, we got 54% that are not really looking at doing addressable targeted advertising. Again, part of this goes back to groups who were in government, groups who are in education, that don't add advertising into their content itself. But even across the board, if we take the other half, we only have a limited number who say that they're already using addressable targeted advertising or dynamic advertising. Obviously, in the past we've had CSAI--client-side ad insertion--in which there was always that battle of the ad blockers versus the new technologies to keep the ad blockers from working. The industry has sort of shifted toward SSAI--server-side ad insertion--which traditionally had been stitching an ad into the middle of content. But we've progressed to the point where that is technically and experientially possible to dynamically target ads. Why do you sense that it's still not caught the industry by storm, especially for those who rely on advertising for the revenue piece?
Rob Gambino: This continues to surprise me. Through all the time I've been in this space, I've either been in the ad tech space or been adjacent to ad tech, or been the guy in the team that understood ad tech, and just how slow the industry as a whole has been moving to targeted ads has surprised me. I think there's a lot of different factors at play there. One is sheer momentum. You've got this giant organization in place that's been here for decades at this point, that's really built around selling and producing advertising inventory in a certain way: "We're going to take a look at Nielsen demographics, and we're going to estimate who might be watching this particular channel at a particular time."
There's a lot of vested interest in keeping that going, and I think that people truly don't understand how it works and why it's better. I think it's an education issue. I ran into this over and over again, being in the ad tech space, and having to explain the basics of how it works and why it works.
The other side of that is there's some reticence to utilize subscriber data. So a lot of the conversations that I would have when I was in the ad tech space with MVPDs or anyone that was looking to do dynamic advertising is, "How safe is my subscriber data when I'm doing this? How ethical is it for me to utilize data in this way without really informed consumer consent?"
I think there's a lot of material out there to get educated on this space. There's a lot of new technologies to secure and anonymize and protect subscriber data that allows you to target, in a safe and ethical way. There's a lot of data out there now that suggests that consumers prefer it. Nobody likes these ads that just don't apply to them. You tune out, maybe you go get a snack, and for the consumer, maybe they don't notice. But if you're the person buying or selling that ad inventory, you're not getting the value on your dollar that you are versus, let's say, spending a dollar on Facebook advertising where it's extremely personalized.
Tim Siglin: That's a fair point. And in fact, what I hear you saying is, if you're going to advertise to me, advertise to me with something that's relevant to me as opposed to something that's completely irrelevant. It's kind of like, once you buy something on Amazon, then your web browser shows you that same thing five times.
Rob Gambino: There needs to be some frequency capping in there.
Tim Siglin: Well, as opposed to showing you the complementary pieces that could go with it. If you think about Amazon prime, now it puts one or two ads before you watch an episode of something. And oftentimes it's a jarring juxtaposition of what they're showing versus what you're planning to watch. My wife and I had that the other day. We were watching an episode of Downton Abbey and the two ads that came up before it were like, "No, that's not the kind of thing we would be watching at all." But there was no way to turn that particular thing off.