TV addressability or specific ad targeting is made possible using data from connected TVs, set-top boxes (STB), video-on-demand (VOD) and OTT services, and combined with high quality first and third-party data
By David Spencer, Senior Director & Head of Sales, Emerging Markets, FreeWheel
In my last article, I outlined various benefits to advertisers of the convergence between linear TV and premium digital video – including addressability, measurability and the importance of telling seamless brand stories. To expand on one of these themes, let’s take a deeper dive into data-driven targeting and explore how addressability is the future of TV advertising.
In a largely satellite-centric region, where the transition to digital broadcasting is uneven, we are still some way from addressability at scale across MENA, but the industry is moving rapidly in that direction. Some countries have national broadband initiatives to support over-the-top (OTT) video, IPTV and 4K transmission, while many of the major broadcasters are diversifying their services to include OTT, on-demand and live streaming options.
Smart TV use is growing, with shipments increasing 18% during the final quarter of 2018, resulting in almost 39 million MENA homes owning a connected TV. Some countries are further along the development curve than others – with 65% of the 900,000 streaming service subscribers in UAE watching via a connected TV – but overall revenues from web TV across the region are expected to reach $1.2 billion by 2024, with many web TV providers already pre-loading their apps into smart TVs.
For advertisers, this rapid evolution of the TV ecosystem brings the possibility of addressability far closer. So, what exactly is it? The Interactive Advertising Bureau (IAB) defines addressable TV as “the ability to dynamically serve an ad within either a live, linear TV or VOD environment specifically to an individual household based on predetermined targeting criteria.”
In practice this means that instead of serving the same TV ads to all viewers watching a particular show, based on information about that programme, advertisers will be able to target specific sections of the audience according to their individual needs and preferences. Two neighbouring households might be watching the same show, but one may see an ad for the latest family SUV while the other sees a commercial for a luxury travel brand, based on their unique household interests.
This highly specific targeting is made possible using data collected from connected TVs, set-top boxes (STB), video-on-demand (VOD) and OTT services, which is then combined with high quality first and third-party data such as location information or verified VOD log-in details. Using this information, advertisers can build models revealing what viewers in individual households are interested in and receptive to, and what messaging will most influence their buying behaviour. They can target niche audiences with highly relevant advertising, increasing the effectiveness of their TV spend and enabling localised advertising at national scale. They can also measure the impact of TV advertising and optimise campaigns in real time, adjusting targeting strategy or messaging to maximise efficiency.
Data-driven targeting is the future of TV advertising and while the MENA region may still be some distance from achieving this at scale, it is well on the way, meaning a more affordable, effective and addressable TV advertising future.