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How Advertisers Can Push Addressable TV to Achieve Its Full Potential

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The evolution of TV advertising has given rise to a new language in marketing circles—one that’s necessary to address the increasing fragmentation and growing opportunities inherent within the space. Unfortunately, not everyone is using the same dictionary when it comes to emerging terminology, particularly as it relates to “addressable TV”—and that’s a problem we as an industry need to tackle head-on.

It’s hard to build a strong foundation for developing marketing channels when there’s misunderstanding and vagueness surrounding fundamental concepts. Although “addressable TV” has become a well-known term, there’s a good deal of smoke and mirrors happening when it comes to true definition, capabilities and execution. Today, what many industry players are defining as “addressable TV” in the marketplace is not actually “addressable,” and expectations around scale are being confused by legacy thinking around match rates. That confusion is leading to missed opportunities within the channel.

The complexity of the evolving TV landscape can be daunting, but marketers are far from powerless when it comes to making the most of this opportunity for deeper consumer connections and enhanced ROI. Today’s brands and agencies can (and should) be leading the charge when it comes to demanding premium solutions within the premium channel of addressable TV. However, doing so requires an understanding of what defines addressable TV, as well as its capabilities. So let’s set the record straight.

What Addressable TV Is—and Is Not

The IAB defines addressable TV as follows: “Technology that lets you show different ads to different audience segments watching the same TV program on IPTV and set-top boxes. Those segments could be defined by behavioral, demographic, and geographic factors from first-, second-, or third-party datasets.”

In other words, running an addressable TV campaign means you’re reaching a known household in real time while they’re watching a certain program. Addressable linear TV requires data from a set-top box to reach a given audience with a specific ad at a specific moment in time. True addressable linear TV is only being done at the distributor level today.

A lot of what’s currently being referred to as “addressable TV” is quite different. For example, a satellite media provider might market its audiences as “addressable,” but that provider’s audience data is on a four- to five-day delay. When true addressable TV needs real-time viewer data, how can marketers know that a set-top box is on and the campaign is delivering to a known audience if the viewership data feedback loop is on a multi-day lag?

In other cases, companies are aggregating remnant TV inventory across the country, applying indexes of audiences across their platforms and calling it “addressable.” These methods are data-driven linear techniques, but they’re not true addressable approaches to reaching a household that we know is watching a program at the time the ad runs.

The Added Confusion of Scale

Compounding the challenges of loose definitions in addressable TV is the issue of match rates and scale. “Match rate” refers to the matching of an advertiser’s desired audience to the available data the enables addressability. For example, an advertiser may match on HH ID, IP address, or numerous other match keys. The challenge is that, when it comes down to audience pool, a lot of these match keys create a dwindling available audience.

Advertisers looking to unlock the power of their first-party data for targeting purposes within the addressable TV space are finding that a lot of their audiences aren’t—well—addressable. And that’s because even among the most widely adopted audience matching and measurement ID solutions, match rates are still quite low, often topping out around 30 percent. Advertisers often accept these low rates (if they are aware of them, that is) because they offer the path of least resistance when entering the addressable space, but often they subsequently find that the scale they’d hoped to achieve in doing so just isn’t there.

As a result of confusion and poor match rates, many advertisers who have tried to enter the addressable TV space in recent years have been left with a bad taste in their mouths. There’s still a lot of work to be done in terms of streamlining and improving accessibility, scale, and transparency within the space.

As industry players work to address technology and capability challenges in the addressable TV landscape, brands and agencies don’t have to wait on the sidelines. To up-level their addressable TV results today, marketers should be taking a closer look at their current partnerships, particularly as it relates to how their matching is being handled. With so many ID solutions available, it can be easy to look for a single path of least resistance and head down that road. But if you aren’t reaching the desired audience with any sort of consistency, the results are destined to be disappointing.

Remember: Addressable TV isn’t reliant on third-party cookies. So why would advertisers need to accept match rates as low as those achieved via third-party cookies? A great lesson we can apply to the TV space from cookie deprecation is that brands, agencies, tech and data providers need to take a portfolio strategy to identity. Bringing more match key optionality to TV will continue to promote improved match rates and scale for truly addressable audiences. It will also help secure scale across future omnichannel integrations, of which TV will continue to be a part.

The addressable TV opportunity is simply too great to have it be marred by confusion and poor audience reach. It’s time to deconstruct the pipeline—and build it back better. Brands and agencies can push the industry—and their own campaigns—forward by demanding more from their partners when it comes to premium channels like addressable TV.

[Editor's note: This is a contributed article from Alliant. Streaming Media accepts vendor bylines based solely on their value to our readers.]

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