Addressable TV: Traditional Television Just Became Untraditional
Aaron Fetters and Helen Katz
Kellogg's and Starcom Mediavest Group
The advertising marketplace is changing. We now live and work in an era of 'big data' where forward thinking advertisers are seeking to take advantage of hyper-targeting and digital optimization. For these advertisers, there is an ongoing push to measure the return on investment of all media dollars, with the goal of reducing waste and increasing impact against target consumers. The media world is changing as everything becomes digital, presenting us with an important opportunity to combine the benefits of data and technology into addressable advertising.
Addressability can be defined as the combining of data and technology that allows an advertiser to serve ads only to households matching a specific target definition. Those targets can be identified using one or several databases populated with demographic, lifestyle, and/or behavioral data. There are currently 20 million U.S. households enabled with addressable television from companies such as DirecTV, Dish, Cablevision, and Comcast. SMG has taken a leadership position in the industry, showing unprecedented commitment to addressable TV. It has spent 10 years in this space, working with 15 advertisers, and delivering more than 100 million impressions. Along the way, it has helped establish standards and best practices, created exclusive opportunities for its clients and executed numerous client campaigns that resulted in improved efficiency and effectiveness. Kellogg's has also been a leader in addressability. It has consistently evaluated its primary key performance indicators (KPIs) such as pre-market quality ("does my creative have the right to succeed?"); audience delivery ("did we efficiently reach our target?"); and in-market effectiveness ("are we moving the needle?"). Television has been challenging in this regard. It is still a mass reach medium, despite the plethora of niche channels available, but targeting has been limited to broad age/sex definitions. Kellogg's is effectively a mass marketer with niche needs. It has a diverse product portfolio, multiple brands within a category, and discrete targets for each. Kellogg's has seen tremendous success with digital addressability, recording a 64% improvement in targeting in 2012, fueled by a shift to programmatic media buys and increased transparency through KPI tracking. That led the advertiser to wonder what might be possible with addressable TV.