Jamie Power, senior partner, addressable television, Modi Media, a division of GroupM, doesn’t see addressable advertising replacing traditional anytime soon.
“Right now addressable television is only in a third of television households,” said Power to moderator and Broadcasting & Cable business editor Jon Lafayette at Advanced Advertising at NYC Television Week. “Addressable television is a complement to linear television and traditional television. It’s not replacing it, and I don’t ever see a world where we will replace it. You’re always going to need that reach to get brand equity.”
Though it won’t replace traditional advertising, Power does see addressable advertising continuing to grow.
“Addressable advertising is at scale right now, the household reach is 42 million households. Next year we’re going to see that number probably be 60 million households.”
Power also mentioned the growth in distinct targeting from addressable advertising’s early years, saying they were beyond generic categories.
“We’re getting extremely granular,” said Power. “Instead of just saying households with a dog, I’m saying households that purchase specific types of dog food.”
“And then on the backend of the campaign I’m able to tell the advertiser, you know Campbell’s, we targeted households that purchase Campbell’s Soup plus households that purchase Progresso soup. I want to be able to tell the advertiser that not only did the household see the spot, but people who were existing Campbell’s purchasers purchased more soup and we were able to steal a share from Progresso.”
Despite the benefits of addressable advertising, Power said they recommend against using it for 1 in 3 campaigns.
“No, addressable isn’t right for every advertiser. Generally advertisers that have a larger segment, it’s more efficient to spend the money in national cable,” said Power.
Other highlights from the session included:
—“I don’t think that television is dead. I don’t think one thing is going to save the future of television. I think that television has to evolve,” said Power. “Data and technology are changing the way we are doing television. Television is measured differently. Addressable television uses extra engagement… I think that just adapting television in the way that consumers are consuming it is going to keep television moving forward. It’s understanding the new landscape and figuring out ways to leverage it.”
—“The smaller the segment the higher the CPM. The larger the segment, the lower the CPM. It’s hard to get an average because we’ve seen CPMs that are $30 and we’ve also seen CPMs that are $500. So when you’re talking to American Express, you’re reaching a really qualified audience. But if I’m selling a tube of toothpaste from Colgate, then probably they’re not going to pay $500 CPM, they’re going to pay $20 CPM. Otherwise the economics don’t make sense.”