Blog / July 12, 2016

The Advanced TV Cheat Sheet: What Smart Marketers Need to Know

42 shares

A few years back, Forrester made waves by predicting that US advertisers will spend more on digital advertising than they do on TV in 2016. Digital certainly has a lot of advantages, such as superior targeting and tracking capabilities. However, it’s premature to declare TV a thing of the past. Although audience numbers have dropped, people still watch. On top of that, TV is a lot more digital and a lot more outcome-based through what is now called Advanced TV. Marketers can now buy TV programmatically, pinpoint ads to specific audiences, present ads customized to the viewers who see them, and even tie in-store sales to ads shown.

What is Advanced TV?

The term advanced TV typically refers to content delivered beyond traditional TV. It can include everything from streaming and interactive to video on demand services, but the term really comprises three primary categories:

  • Addressable
  • Connected
  • Programmatic

Like the term “Advanced TV,” these categories are relatively new as the technology itself is relatively new. To bridge the knowledge gap, here is an overview of each and which version fits best with brands’ objectives.

Addressable TV

What is addressable TV?

Addressable TV refers to ad inventory available through cable (set-top box) providers, such as Time Warner and Comcast, who present a brand’s messages through their linear programming or video on demand (VOD) inventory. Advertisers can target individual households using first- and third-party data. Online and offline outcomes, such as site activity, brand life, and sales, are the primary reporting metrics.

Challenges

Scale is a bit of a challenge with addressable TV. Many of the set-top box providers are regional or focus on a particular demographic, making it difficult to launch campaigns to national audiences. Purchasing audience from multiple cable providers may increase the sample size, but it does not guarantee that it will be any more representative than a Nielsen panel.

That said, eMarketer predicts that addressable TV advertising will grow almost 120 percent this year, with marketers spending $890 million.

Marketing Benefits

Addressable TV allows a marketer to target households within a DMA based on specific criteria. For example, marketers can target households with children or ones that have at least one member who has an affinity for, say, fly-fishing. It’s still mass marketing in that all households that match the criteria will see the same ad in the same programming and dayparting. However, advanced TV drives overall efficiency by suppressing households that aren’t a good fit for the advertiser.

Connected TV

What is connected TV?

Connected TV is television delivered via over-the-top (OTT) devices (Roku, Apple TV, etc.) or Smart TV sets (TVs connected to the Internet). Connected TV offers advertisers targeting and measurement capabilities similar to digital channels. It has a reach of more than 50 million US households with geotargeting at the ZIP code level. Device-level targeting is also available for OTT.

Challenges

Standardization is currently an issue with connected TV. Like the early days of iPhone and Android, manufacturers are building proprietary software, making it difficult for marketers and app developers to create consistent cross-platform campaigns.

Marketing Benefits

Connected TV is ideal for products in which the entire household may participate in the purchasing decision—family vacations, car purchases, home improvement, family calling plan—and are often used in conjunction with campaigns on other devices. Let’s say a dad looks at a video ad for an SUV on his smartphone. With cross-device identification, that auto brand can deliver a TV ad for the same SUV, influencing the entire family all at once. Conversely, if a mom views a display ad for a cruise, that can trigger the display of a TV ad from that cruise line.

Programmatic TV

What is programmatic TV?

Programmatic TV refers to advertising that’s purchased through an automated platform and delivered via set-top boxes (e.g. addressable TV described above). Marketers bid on inventory through sell-side providers that work directly with participating networks. Traditional TV metrics (daypart, network, GRP) inform the targeting and reporting, but marketers use a variety of data points to select the programs, dayparts, and networks to bid on. Programmatic TV reaches approximately 100-plus million households and more than 80 DMAs.

Challenges

Programmatic TV is not to be confused with programmatic video. While TV options are growing, the technology and inventory are not yet where video is. Additionally, many programmatic TV providers have not yet switched to outcome-based performance models, leaving many brands in the dark about the effectiveness of their campaigns.

Marketing Benefits

Brands like programmatic TV when they know that a particular program or daypart over-indexes for their target audience. For instance, a cooking show may attract more moms with young children, making it the perfect opportunity for a diaper manufacturer.

Where Does This Fit in Your Marketing Plan?

So, should you make the jump to these new platforms with your brand’s marketing strategy? It depends on what you’re offering.

Generally, advanced TV is more appropriate for products and services you want to advertise using more granular targeting and measurable results. Although traditional TV is a top-of-funnel channel, advanced TV’s greatest advantage lies in its lower-funnel consumer activation. It more closely mirrors digital ads.

Within that lower-funnel activation is the holy grail of advertising: return on ad spend. Advanced TV is appropriate for your product if you are looking for specific business outcomes beyond branding and awareness. Want consumers in a certain area to visit your store? Are you selling high-value items with a long purchase cycle? These are marketing objectives that advanced TV helps to achieve.

As marketers seek more ROI and measurable outcomes across campaigns, interest in and capabilities of advanced TV will grow exponentially in the coming years.

For more information, be sure to see our primer on advanced TV.

 
Boaz Cohen

Boaz Cohen GM, TV & Advanced Platforms

Date: 07.12.2016
Tags: , , , ,