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?
To understand advanced TV, we must first define what it is:
Advanced TV refers to content delivered beyond traditional TV executions. It can include everything from streaming and interactive to video-on-demand service. The term really comprises three primary categories, including addressable TV, connected TV, and programmatic TV.
Advanced TV allows advertisers to target and reach specific households based on granular consumer data, bringing marketing potential far beyond the basic demos that traditional TV typically targets. Additionally, advanced TV enables direct measurement of action taken as a result of seeing an ad campaign such as sales and foot traffic. It is data-driven, addressable and accountable.
Types of Advanced TV
Advanced TV is made up of three primary methods for ad delivery, each based on the different ways people watch TV today and the hardware included to enable viewing:
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 lift and sales, are the primary reporting metrics.
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 geo-targeting at the ZIP code level. Device-level targeting is also available for OTT.
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 through index-based targeting.
Benefits of Advanced TV
Advanced TV has wide ranging capabilities. It can be ideal for products in which the entire household may participate in the purchasing decision, or it can help to focus on specific viewers. Key benefits include:
Advanced 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.
Advanced TV, and in particular, 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 online and interacts with it, that can trigger a TV ad from that cruise line through connected TV.
Brands prefer 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.
Advanced TV is similar to digital marketing channels in how it allows for better attribution. Unlike traditional television advertising, purchases, in-store traffic, buying propensity, ROAS and other types of conversion behavior can be tied back to advanced TV campaigns so marketers know if their ads are affecting their bottom line.
With advanced TV, brands can send personalized messages to their target TV audience based on consumer data. It is similar to digital advertising strategies, but not exactly the same. Different forms of advanced TV allow for different kinds of personalization based on how they target viewers. None of them provide a direct one-to-one match with consumers, but they do all offer levels of personalization far beyond traditional TV executions. For example, with addressable TV, you can use 5-6 different versions of an ad to a target audience. Although brands aren’t getting quite as much personalization as digital advertising, they’re getting more than ever before.
Advanced TV is currently a premium product, but since only targeted households are served ads, advertisers are likely to see cost savings. In addition, advanced TV lowers the barrier to entry to TV advertising, helping more brands become “TV advertisers,” which increases their prominence with consumers.
Challenges of Advanced TV
There is going to be pushback from traditional TV marketers. A focus must be placed on increasing awareness around the foundational aspects that advanced TV is built on, such as targeting, interactivity and engagement.
Advanced TV could potentially leave a large gap that traditional TV advertising never had to deal with. Selling ads to a wide variety of channels will no longer be an option because of the increase in targeted ads that will emerge and become the norm.
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.
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. This will likely put a strain on the industry as its starting out. The ad delivery processes must develop and become as easy as it is in traditional TV for increased market adoption.
Advanced TV is new for many marketers, and education will be necessary to move the industry forward. As an example, programmatic TV is not to be confused with programmatic video, which many advertisers are already familiar with. Although TV options are growing, the technology and inventory for programmatic TV are not yet where video is. Additionally, many providers have not yet switched to outcome-based performance models, leaving brands in the dark about the effectiveness of their campaigns.
Common Advanced TV Questions
How long until advanced TV becomes the norm?
Although it might not be so obvious to the normal viewer, digital and traditional TV have been converging for years. With the integration of streaming services and network applications into traditional TV sets, and considering how fast the TV replacement cycle is in today’s market, it’s only a matter of time before advanced TV becomes traditional TV.
How can advanced TV lead to more targeted impressions?
Advanced TV brings advanced data with it. However, agencies need to make sure that the platform they are using when integrating their data can be as accommodating as possible. With the emergence of advanced TV, marketers will be able to know who they are advertising for while providing an interactive experience. As a result, measurable outcomes will be plentiful.
How does advanced TV fit into your marketing plan?
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. Learn more about our Advanced TV solution and the future of television.