By: Jim Poh, SVP, Communications and Media Director
CBS and Dish Media just announced that they have completed a test of addressable TV in 9MM Dish homes in CBS O&O markets. The objective was to determine the feasibility of delivering different commercials to specific households on a national basis, and apparently they were pleased with the results. The way it works is through set-top boxes that are preloaded with alternative creative that can run in place of a network spot when signaled to execute. It is sort of the old “network feed” strategy of delivering alternate creative but on a household level.
Addressable network TV could lead to a variety of interesting strategies for national brands. CPG marketers could advertise different brands in households with kids versus those without. Automakers could deliver ads for different models or incentives to different households based on the composition and auto purchase intentions of those households. QSR brands could creatively target different competitors in different households based on purchase history. With sufficient data, it seems any type of ad targeting is possible.
This capability is another step in the march towards even more targeted advertising. However, don’t expect to place addressable ads using network TV any time soon. There is still a lot that has to happen before that. TV networks don’t have set-top boxes in people’s homes, so addressable network TV ads will require the cooperation (read “payment”) of multiple cable system operators and Smart TV manufacturers to achieve truly national coverage. Additionally, TV networks will have to sort out pricing models that make sense to advertisers and return sufficient profit to make the venture worthwhile. There may also be some pushback from affiliate stations that may see this as a potential revenue drain from national advertisers who might no longer need to supplement their national schedules with spot TV buys to execute various geographical strategies.
Of course, many of the benefits of addressable TV are already aptly delivered through digital video platforms that can target whatever audiences we choose, usually at a lower cost than TV. However, delivering your message to extremely targeted audiences may not always be the best approach, despite the industry’s rush to identify and deliver them. Few products or services are so limited in appeal that we can reach the majority of prospects after applying a host of qualifying filters to our digital buys. Heavily filtered audiences may be more pure, but they are also more expensive and small. Also, some psychological principles, like “signaling,” require that we create awareness of the brand among users and their peers alike. In those instances, broader audiences may be more desirable. The bottom line is that targeting advertising is good, we just need to be judicious in the ways we approach it.
At Intermark, we have been approaching ad delivery based on format (video) rather than platform (TV) for several years now. We see the increasing ability to target specific audiences as a benefit to brands that in the past were shut out from video based messaging because they couldn’t afford TV. Having more options for delivering content increases our ability to execute strategies and reduce costs, so the possibility of adding addressable network TV to the mix is an intriguing development.