What’s Next for TV Advertising?

While we’ve been watching TV, advertisers have been watching us. Not literally, of course. But they are using new technology to watch our TV viewing habits and marrying that information with our lifestyle data in order to deliver the right marketing message to the right consumers. What does this mean for viewers? In the long run and for all intents and purposes, it means the only advertising you see will be about things that interest you, according to data. But does the end justify the means?

TV vs. Digital

Currently, brands purchase traditional TV advertising to reach their targeted consumers based on network programming, stated viewership and day-part performance. In other words, brands buy TV using broad, high-level consumer data.

Digital advertising has long dominated segmented marketing strategies because the vast amount of demographic and behavioral data collected can help a brand slice and dice their target segments by varying metrics. Digital advertising platforms can then compare their usage data with a brand’s target audience demographic profile, and indicate which digital outlets are likely to reach the brand’s audiences. Think of it this way: A brand wants to reach women age 24-45 who live in Texas and have a demonstrated interest in DIY home decorating projects. The digital platform’s user data can be sifted through using those parameters and identify the advertising vehicles most likely to reach that audience.

Addressable TV

Addressable TV is the new frontier for television broadcast advertising. It’s currently only a fraction of the market, but it’s growing and attracting brands’ attention. Addressable TV enables brands to use consumer data to guide their media purchases at a more detailed level, much in the same way brands approach buying digital media. Simply put, addressable TV provides the ability to deliver different advertisements to different households while they are watching the same program.

For example:

Jennifer is a 30-something working mother of two elementary-age children, is married, owns her home, and lives in Philadelphia. Rich is a 60-something man recovering from a serious illness, considering retirement, has one grown son and three grandchildren, and has been married for more than 40 years. We can easily surmise that Jennifer and Rich lead very different lives, with minimal – if any – shared interests or needs. However, as different as they are, they both watch CBS Sunday Morning regularly.

A financial services company that advertises during CBS Sunday Morning programming knows the show attracts these two different types of consumers, yet the financial services company considers both Jennifer and Rich as target consumers. With a traditional TV advertising, the financial services company could only air one commercial, hoping that it would appeal to both Jennifer and Rich in some way.

Through addressable TV, our example financial services company can deliver two different messages – one designed specifically for Jennifer and one for Rick – at the same time. That kind of customization historically results in greater efficacy and better return on investment. Now, layer on automatic content recognition technology, and efficacy and ROI can skyrocket.

Automatic Content Recognition

Imagine knowing whether or not the TV advertising you spent thousands to produce and deliver to your target audiences was viewed or not. That kind of data has been the holy grail of TV for brands since the first commercial aired. With automated content recognition, the holy grail is in reach.

AdWeek speculated recently that automatic content recognition (ACR) – an acronym you’ve probably never heard of – would change TV advertising forever. Whereas addressable TV allows a brand to buy media to reach very specific audiences, ACR data tells the brand whether or not those audiences actually viewed the ad. For our example financial services company, this means the brand will know if Jennifer viewed the ad or not. Really.

ACR’s technology automatically detects and indexes content that is playing on a TV in real time, confirming or denying if the media purchase is working as intended. Further, ACR is an independently verifiable source for data; it isn’t filtered through or packaged by a network in an effort to validate the efficacy of a media purchase. ACR provides data that brands have craved. The best part? ACR can help brands activate that viewer data in a way that drives ROI.

By connecting ACR data to sales performance (or another specified goal), brands can determine if their advertising campaign delivered actual results. In addition, brands can use ACR data to fine-tune their messaging and/or eliminate versions that aren’t performing well, thus optimizing their media purchase.

In the U.S., there are more than 74 million households with the technology needed to support addressable TV and ACR. That number is expected to increase by double-digit, steady growth as the technology matures and infiltrates the marketplace. Big brands with big budgets are the primary users of addressable TV and ACR right now with national media buys. The technology isn’t available at a regional or local level…yet; however, it is coming. Now is the time to investigate how addressable TV and ACR can best work for your brand. You’ll be that far ahead of your competition.

Want to talk about addressable TV and ACR? Give me a shout at Katie@kgbtexas.com.

KGBTexas is a full-service marketing agency based in San Antonio and Houston, Texas. Explore more of our advertising, public relations, public affairs and crisis management work here, get a full download on all of our marketing services, or contact us today to set up a consultation. Our award-winning team of creatives and communications experts are ready to take your brand to the next level.

Sources:

Addressable TV advertising: Creating a better, more personal TV and video. (2016).

Addressable TV from the media buyer’s perspective: What’s hype vs. reality. (2017). 

How an acronym you’ve probably never heard of will change TV advertising forever. (2018).