Addressability At Scale Makes It Into “Next Year”
For at least the last decade, both buyers and sellers of TV advertising have promised that “next year” will be the year that household-level addressability will be available at scale. In my opinion, the TV industry is finally into “next year” but getting there did not go as originally planned.
The original expectation was that the video distributors would develop technologies to enable the insertion of specific ads, targeted to specific households, into their on demand (VOD) and live-linear feeds.
That never played out at the scale advertisers wanted. Instead, we got into “next year” via the perfect storm of accelerated cord cutting, the rapid development and introduction of IP-based video services, and an even faster adoption of streaming by consumers.
According to eMarketer’s latest report, 75% of the US population uses a connected TV to watch video content. At the same time traditional paid TV subscriptions continue to fall (dropping from 88% in 2012 to 66% in 2022).
What does this mean?
There is already a significant amount of TV ad inventory in the CTV ecosystem with the targeting, measurement, and optimization characteristics of digital inventory
Advertisers are rapidly following eyeballs, with CTV ad spending, according to eMarketer, forecast to exceed $26 billion in 2023 (up from $11 billion in 2020)
Unlike digital where 65-70% of the ad spend is with 3 companies, CTV is very fragmented. And unlike traditional TV, CTV does not yet have any cross-publisher work-flow systems in place, making buying and measuring of CTV campaigns very difficult (unless the brand uses a single DSP, like The Trade Desk, or a single independent CTV ad server, like Innovid)
Heading into 2023, brands must accept that things will not change immediately, but this new, broader definition of TV is here to stay – and TV investments must be planned, activated, and measured holistically – no more silos. That said, they should adopt, for now, a “horses for courses” approach.
While linear TV lacks the targeting precision, measurement fidelity and real-time optimization of CTV, it does offer known workflows that achieve reach goals. At the same time, while CTV delivers the digital-like targeting, measurement, and optimization tools, it still is a fragmented environment making it complicated to buy and measure across multiple CTV services. So, use the processes and procedures in place to easily reach consumers on linear TV and leverage the targeting, measurement, and optimization capabilities of CTV to find incremental reach, amplify messages and push consumers through the “purchase funnel”.
There was a time when digital was called “new media”. Now it is just “media''. There will be a time when CTV is just TV. Until then, advertisers must recognize the strengths and weaknesses of linear TV relative to CTV and play to the strengths of each – just as they do with digital.
