Addressable TV set to take off

26 November 2014

NEW YORK: Addressable TV, currently less than 1% of the total value of TV adspend, is poised for take-off but one leading industry figure has cautioned that it's not for everyone.

"(In) 2014, I see a marketplace that has essentially gone from zero to $300m of spend," Tracey Scheppach, evp/precision video at agency Starcom MediaVest Group, told Beet.tv. She reported that SMG had done more than 70 campaigns with 30 clients and "we're seeing amazing results in terms of efficiency".

She expected that the market was going to get rapidly bigger as more cable operators introduced addressable options over the coming months – addressability being dependent on the software installed in set-top boxes to ensure that ads are only shown to the households the advertiser wants to reach.

"We still haven't cracked the code on the broadcast side yet," Scheppach said, but ultimately that would not be a problem: "Video will all be IP-delivered in the end, which means it will all be addressable in the end."

Addressable it may be but there remain practical difficulties to overcome, as Michael Bologna, president of Modi Media, part of GroupM, explained to Ad Exchanger.

"At the end of the day, it's challenging because you have to determine who is your real customer segment, then you have to match data against subscriber files and determine what percent of the universe is that segment but it's got to be done across five cable systems who all use different technology, data sources and back end."

After all that, it was quite possible that the effective CPM might compare unfavourably with a regular TV campaign. "There is waste in television and addressability doesn't make sense for every advertiser," Bologna said.

"If your target audience isn't small enough and the cost of your product isn't high enough, national television still is and always will be the most efficient way," he added. "Addressability is really about refining targets and minimising waste."

Scheppach had a more expansive outlook, however, expecting that addressable would benefit everyone from the biggest advertisers, with particular targets in mind, to the smallest whose limited budgets had previously prevented them getting onto television.

"If you have creative and you have a strategic target, in the end I think addressable is going to work," she concluded.

Data sourced from Ad Exchanger, Beet.tv; additional content by Warc staff