TV Feels the Pressure to be More Valuable to Advertisers

My colleague recently noted that TV’s lack of measurement capabilities plays a role in the decreasing confidence advertisers have when investing ad dollars in the medium.  Mediums that offer accountability for the performance – and return – on an ad are becoming the most obvious spaces to invest in.  And as more and more videos are popping up on highly measurable digital media, TV is racing to stay in the game.

There are a number of factors that contribute to choosing the most efficient mix of media, formats and timing for an ad campaign. But the targeting and measurement capabilities are two essential components to consider.

TV has no choice but to investigate ways to offer advertisers a more valuable format, in terms of both targeting and measurement. Comcast has taken the lead by running tests on a new format dubbed addressable ads.  An addressable ad format offers deeper, more relevant targeting capabilities along with an easier way of measuring effectiveness.

Walgreen’s and Walmart took part in a trial performed in Baltimore that reached about 60,000 households.  The addressable-ads were sent to different groups of households that matched the specific audience segments identified by the advertiser.

The results found that there was a 32% less tune away among the homes that received the addressable ads than those that saw a non-addressable ad (one that didn’t speak to a specific audience segment). They also found that this hyper-targeted process is 65% more efficient at reducing undesirable eyeballs.

The most exciting part about addressable advertising is that it opens the door for some exciting new possibilities. Although it’s not actually being done yet, addressable ads have the capability to target to individual household members.

Imagine if only woman were served commercials for feminine hygiene products.  I don’t think men would object to that!

It’s important to mention that 6% of notified households decided to opt out of the Baltimore test.  This is may or may not have been due to privacy concerns, but addressable advertising does utilize behavioral and purchase data to group specific audience segments.  As this technology gets closer to reality, look for some serious privacy debates.

The jury’s still out on TV’s progression toward addressable ads.  Give us a shout out and let us know your predictions. Looking for a media planning agency? Contact us today about our capabilities.

Flickr image courtesy of dhammza