#AdvancedAd 2016: Addressable Advertising Still a Local Play

Operators, programmers must come together for it to reach national stage

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New York -- Addressable TV advertising has been a hit at the local level, but don’t hold your breath to see these techniques go big on the national stage anytime soon. 

The issue is that the technology to enable addressable TV advertising is owned by the operators, while national inventory is owned by the national networks, Michael Bologna, president of MODI Media, said here on a panel dedicated to the topic here at the Multichannel News/Broadcasting & Cable Advanced Advertising and Measurement Summit.

Getting those two sides together requires cooperation. “They’re both stubborn and difficult,” Bologna said, offering a prediction that national addressable TV advertising is still five to seven years away.

But not everyone is as pessimistic about the near-term prospects for a national addressable market.

“I’m a little more optimistic than that,” Tracey Scheppach, executive vice president, Precision Video Director at Starcom MediaVest Group, said. Agencies, she explained, can take the lead on bringing those sides together, but agreed that “we could be here awhile waiting,” if the operators and programmers are left to negotiate all of the rights and fees.  

Bologna said those broader opportunities could occur first outside the U.S. in markets that don’t have local avails.

But the successes found on the local level indicates that both sides should do more to come together.

“Right now, demand certainly outpaces the supply,” said Matthew van Houten, director of strategy and business development at AT&T AdWorks, which covers 26 million homes and 13 million that are enabled by addressability. “We’re just scratching the surface of the technology and the opportunity here.”

Later, by way of example, van Houten noted that an addressable auto campaign with a domestic company generated $11.3 million in incremental sales, one on travel produced a 23% boost in single bookings, and another with a financial institution saw a rise of 51% lift in new accounts.

Cablevision Systems, meanwhile, went full-footprint with its addressable platform in 2010 that is driven by anonymous data culled from set-tops across about 2.6 million homes. And it has some success stories to share.

One involving a tune-in campaign with a cable news network, for example, drove a 19.5% boost in viewership for homes that were exposed to the campaign, Jennifer Koester, senior vice president of advanced advertising product & data analytics at  Cablevision Media Sales, explained during the panel, which was moderated by Multichannel News editor Kent Gibbons.

An another example focused on an auto campaign drove a return on ad spend of $1.8 million – a media spend of about $405,000 resulted in incremental sales of roughly $2.2 million.

“That’s not bad for a day’s work,” Koester said. 

And that’s also the beauty of addressable advertising – it drives “actual sales conversion,” Bologna said, noting that the promise of addressability is one of the big things that’s keeping TV advertisers coming back.

“I’ve seen [addressability] work for every category,” Scheppach said, later pointing to a sample of a “MAPS TV” solution case study that showed a 120% increase in visitation to a retail location.

“Television advertising works; addressable television advertising works harder,” she said.

Koester said Cablevision is launching an insights tool for political advertising to help partners drill down to specific voter regions. “Political is a huge opportunity for addressability.”

The discussion also touched on programmatic models that are becoming an increasing factor in TV ad buying and selling.

Bologna said it’s a tough market to get a grip on because there are “50,000 different players trying to make a buck arbitraging television….everyone has their own story and everyone’s story is different from the next guy.”

AT&T, meanwhile, recently launched a programmatic TV platform with Videology that aims to bring a self-serve tool to the ad-buying community.