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Analyzing Advanced Television: Addressable TV

Analyzing Advanced Television: Addressable TV

Thanks to the internet, television as we know it has changed forever. These days the TV viewing experience has expanded far beyond an analog signal and receiver. With video on demand and streaming services, advanced TV offers a wide-ranging variety of viewing options to all kinds of audiences.

For advertisers and brands, the advent of advanced TV is a positive step. Unlike analog television, advanced TV provides advertisers and brands more data than they’ve ever had before. With a growing bank of information available at their fingertips, brands can make better informed decisions when it comes to wisely choosing where to spend their advertising budget. Reaching the right audiences (those who are most likely to convert into customers) is just one of the major reasons why advertisers and brands should be bullish towards Advanced TV.

Over the course of the next few weeks, we’ll examine in depth three major subcategories of advanced TV advertising. This week, we’re starting with addressable TV ads, which recently has gained substantial momentum. 

Addressable TV: Steady demand that’s expected to rise

If you’re not familiar with addressable TV, here’s how it works. In a nutshell, ads are delivered to households depending on whether they fit an advertiser’s targeting criteria. Brands and advertisers can utilize addressable advertising through linear TV and video on demand (both online streaming and standard cable). Excluded are connected TV, smart TV and over the top TV options.

With addressable TV ads, advertisers and brands can reduce the number of ads shown to people who aren’t likely to purchase their products or services. At the moment, addressable ad buys just “supplement national TV plans, because they can only work with the subset of homes that are addressable-enabled” according to eMarketer. This added layer of advertising means ads reach the right households more often, eliminating wasted impressions and yield higher advertising impact.

Compared to standard national advertising inventory, which typically targets by gender and age, addressable TV ads are slightly more costly. But considering that targeting is more specific, they may be worth the investment.

Recent research conducted by Advertiser Perceptions compiled advertiser’s reasons for preferring to spend on addressable buying. In a March 2017 study, which was funded by AT&T Adworks, advertisers overwhelmingly voted targeted precision and granularity as a major reason for purchasing addressable TV time. Increased ad relevance, targeting unique households, eliminating waste in TV buys and better ROAS/ROI rounded out the top five in the survey’s results.

Addressable TV advertising has experienced stable growth in recent years. But investment in this category of advanced television is expected to increase over the next few years. Estimates in the United States project to the market to rise from $1.26 billion this year to $3.04 billion by 2019.

Here’s what eMarketer reported in their latest report on television, detailing the progress on addressable TV:

“Superior ROI, and the potential for an expansion of both available addressable inventory and the number of households that can be reached could both be drivers of this growth.”

Have you been searching for ways to make addressable TV a part of your advertising plan? Contact us for assistance today.

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