In the early days of television, families would gather around the TV set and watch the most popular shows offered by a broadcaster. These days are long gone. In today’s reality, the viewers demand their shows whenever they want them and wherever (i.e., platform, device screen size, and any other parameters of the user’s device). With such a fragmented audience, it can be challenging for advertisers to target the right audience with the right message. This is where addressable TV advertising comes in. Let’s take a closer look.

Addressable TV advertising: a big shift to measurability

Addressable TV advertising is advertising that’s individualized according to the household. It’s delivered to Internet-connected devices and is enabled by the programmatic algorithm. This way,  even though your users may be watching the same program, they see different ads, tailored specifically to their needs, which are determined by data-powered AI and MA algorithms. In other words, it’s programmatic on TV.

This gives advertisers the ability to shift away from the traditional, manual ad buys and focus more on how relevant their message is to their audience and measure the impact.

If you are a marketer, you can use addressable TV advertising to enhance your targeting efforts and reach custom audiences with added creativity. Thanks to a higher level of granular TV attribution, you can get even deeper insights into the overall performance of your ad.

Reaching cord-cutters with addressable advertising

We already mentioned that TV viewing habits have changed over the years, but this is especially evident when we look at the number of people who no longer subscribe to any form of paid television. In fact, according to IDC, 23% of the households don’t have a pay TV subscription, and this number is expected to increase by 29% next year.

Studies that have been done on the cord-cutting show that this shift is more about money than content. What it all boils down to is the format. The customers want to watch their favorite shows in the most convenient and cheapest way possible. The majority of Smart TV watchers are aged 25-35; these are millennials with a mid-level of income. Therefore, a more targeted approach is needed to reach them on all kinds of Internet-connected video streaming devices.

Dispelling 3 myths about OTT

Whenever a new disruptive technology comes along, there are bound to be some myths swirling around it. So, let’s dispel the most common myths about addressable TV advertising:

  • It only makes sense if you have a small target audience. While the value of addressable advertising will vary on a case by case basis, the fact of the matter is that it makes sense for pretty much all advertisers. Even if you are in the industry that targets very broad audiences, you can still use the insights that you obtain and apply it to programmatic TV buying.

  • The CPM premium is too expensive for broad targeting. In a head to head comparison of CPMs between addressable and linear TV, addressable is more expensive. However, you get more value with addressable. For example, you would like to target 25% of the total audience and you decided to buy a regular TV ad for $20 CPM. However, since you only care about 25% of the impressions, you CPM will be right around $80.

  • Addressable TV is only for broadcasters. Digital buyers can also take advantage of addressable TV because it offers the same functionality as digital videos. On top of this, addressable TV is fraud-free, offers a much longer viewing time on average and increased memorability.

Benefits of Addressable TV advertising

Joint viewing of programs reduces the cost of contact for advertisers. Besides, brands can test formats and come up with non-standard advertising activities since the functionality allows the viewer to go to the brand page after viewing ads, make purchases, see special offers, participate in contests and promotions. Also, advertisers can run cross-channel campaigns using mobile devices, or “catch up” with advertising on other online devices, after they watch the ad.

The advertiser receives a detailed data considering the effectiveness of an advertising campaign, evaluation of views/clicks/ interactions with content, analysis of behavior, the reaction of viewers to this or that format, the ability to conduct polls, obtain feedback and more. Moreover, you will be able to see the effectiveness of your ads on all platforms which allows you to increase engagement by tailoring your content for specific audiences and devices.

Best practices for Addressable TV ads implementation

In order to enjoy all of the benefits addressable TV has to offer, you need to implement it properly from the very beginning. Here are some tips on how to do this:

  • Make sure that attribution measurements are set up so you can measure your KPIs

  • Your ads should have a widescreen aspect ratio of 16:9

  • The  bitrate of your video must be at least 5,000 kbps

  • Use only VAST tags

  • Include both 15 and 30-second ads creatives

  • Include a CTA in your ad

Best practices for addressable TV

Concluding thoughts

The Addressable TV allows both advertisers and publishers to use programmatic platforms which offer a wide variety of benefits. Just like with web programmatic ads, media-buyers tune up their OTT campaign through DSP. The publishers decide how they want the OTT ads to be displayed on their inventory and where. They can define the floor bid and other parameters they usually select on SSP.

Recently, programmatic OTT platforms have become very sophisticated in terms of segmenting audiences and performing in-depth campaign analysis. This way, publishers can also easily monetize remnant inventory because media-selling, as well as media-buying, is performed in real-time.

With addressable TV advertisers no longer have to guess what shows your audience is watching, since you can reach them whenever and whatever they are watching. Just as importantly, the advertisers have control over how their message is being delivered. They can manage how often their ads are shown and manage the overall reach to reduce audience fatigue and increase engagement.

DSPs offer incredibly detailed targeting, such as geography, browser, device, operating system, dayparting, demographic data. SmartyAds DSP provides excellent statistical analysis, where you can check the effectiveness of your campaign in great details and in real-time. Therefore, campaign optimization becomes even more accurate and productive.

SmartyAds helps brands deliver their message to the right audience at the right time and place. Contact us today to find out how to make it on OTT!

Written by
Irina Kovalenko, CMO of SmartyAds
March 2019