Advertisers’ appetite for addressable TV is growing. eMarketer projections show that addressable linear TV spend will increase by 33% in 2021, and ad spend is expected to surpass $3.6 billion in 2022. Advertisers are embracing audience-based buys and the opportunities to reach consumers through addressable TV solutions. Simultaneously, more programmers are entering the market, increasing the availability of addressable inventory.
Addressable TV provides an opportunity for advertisers to deliver an ad with relevant messaging to target audiences on the biggest screen in the household. For digital marketers this might sound very similar to OTT, but addressable TV differs in that it is targeted advertising through traditional cable and satellite infrastructure. Let’s dive into how this actually works and the mechanics of addressable linear TV.
Breaking down addressable linear TV
Indulge me for a moment as we break down how addressable linear TV works. Let’s say I have a dog and you have a cat. We’re unwinding and watching the same TV show from our own homes through our cable boxes after a long, arduous day at work. During the commercial break, we each see an advertisement, but the actual commercial we’re viewing is tailored to our specific interests and behaviors. I watch a dog food commercial whereas you see a commercial selling cat treats. Data enables advertisers to target and deliver addressable ads to specific TV households or devices.
Digitally enabled addressable linear tech delivers simplicity and control
There’s a distinction that needs to be made between legacy addressable linear TV executions, that have been going on for years, and this new wave of digitally enabled addressable linear technologies.
In the past, if a brand decided they wanted to reach specific users or households with their messaging, rather than running a national TV campaign, they may reach out to an MVPD, multichannel video programming distributor, and ask to run an ‘addressable TV campaign’. The MVPD owns the cable boxes — approximately 2 minutes of ad breaks an hour — as well as rich subscriber data. These assets give the MVPD the ability to sell against and deliver ads to the desired target household audiences. This results in audiences viewing ads relevant to their interests, and the MVPDs effectively selling their ad inventory, which is great! But marketers have largely struggled with how to effectively include addressable in their marketing campaigns.
New digitally enabled addressable TV executions enable brands to reach specific households or devices with their messaging and gain efficiencies via programmatic buying. These digital addressable linear executions are made possible by improved technology at the device level that allow for real time one-to-one digital ad replacement. Furthermore, device advancements by the cable distributors themselves and TV OEMs are making it possible to serve different ads to different households within the same ad slots.
This ‘digitizing’ of traditional TV hardware is the next step in the convergence of traditional and digital TV as it allows for programmatic buying across cable and satellite TV for the first time. In contrast to legacy addressable TV executions this allows a brand to:
- Control the process – in the same way a brand plans and executes digital ad campaigns across display, video, and OTT can now include linear TV.
- Increase reach – OTT and cable households have long been divided universes a brand needed to reach separately. They can now include cable households in their “unified TV buys” with OTT.
- Centralize reporting – digital measurement, attribution, and reporting KPIs can be omnichannel.
Ready to learn more about how addressable TV and advanced TV solutions can take your campaign to the next level? Take our SpotX University course: Advanced TV for Advertisers.
Brian Garey is Director of Advanced Solutions at Magnite. He joined Magnite in July 2021 via the acquisition of SpotX where he worked for 7 years prior. His team focuses on emerging technologies and advanced integrations including addressable TV and OTT header bidding. When he’s not creating workflow diagrams Brian can be found recreating outdoors either biking, fishing, rafting, skiing, or climbing in the Pacific Northwest.