Networks such as Viacom, CBS and Fox are in talks with pay TV providers to begin selling a small proportion of national inventory as targeted ads, the Wall Street Journal reported.
Targeted ads allow advertisers to serve up different commercials to different households watching the same TV programme – in effect targeting households with the ads calculated to be most relevant to them.
The online targeted-ads business is rapidly making inroads into TV’s classic ad model, which is based on far less precise data, basically age and gender demographics. Advertisers are increasingly expecting to direct their ads based on a sophisticated wealth of data.
The TV networks’ plans are in an early stage, according to Journal, but some networks are also exploring links with tech companies that can facilitate ad targeting via smart TVs.
Viacom, owners of MTV and Nickelodeon, already has deals with various pay TV companies that carry its programmes, and the company has been trialling targeting using in-house promotional ads.
CBS is also reported to be pursuing a similar route and intends to offer targeted inventory to advertisers over the next year; Fox, too, has similar plans.
Networks sell approximately 14 minutes of commercial time per hour and want to leverage the return on that airtime.
“We have advertisers that want it [addressable advertising],” one executive at a TV network told the Journal. “We have constrained inventory we have to get more yield from. We can only get a certain rate of change on demo buys each year, and can charge a premium for addressable ads.”
Addressable ad spending went through the $2 billion mark last year and is forecast to rise 23% to $2.54 billion this year, according to an eMarketer report – fast growth, but still only accounting for 3.7% of total TV ad spend.
US advertisers will spend $70.83 billion on TV in 2019, and eMarketer says the overwhelming majority will still be sold through traditional models.
It expects a 58.4% lift in US programmatic TV ad spend this year to $2.77 billion.
Sourced from Wall Street Journal, eMarketer; additional content by WARC staff