Consider current addressable TV advertisingon traditional linear TV platforms and premium “non-linear” TV platforms on digital platforms.
It turns out that both growing TV platforms (also factoring in probable overlap) account for around $3 billion each.
For example, U.S. addressable TV ad spending is projected to grow to $3.3 billion by the end of 2020, according to eMarketer -- growing more than 30% over 2019. This compares to the traditional TV total advertising -- national and local -- mostly stagnant at around $70 billion.
Some 15% of advertisers are now including addressable TV regularly in their buys -- while 35% have tried it. To some, this indicates a technology moving beyond its infancy.
Still, in perspective to the broader market overall, addressable advertising is slower-moving. Why? Marketers are still leery about the cost -- what this ad “tax” it will mean to their overall media costs.
Now let’s look at “nonlinear” TV advertising on Hulu and full-episode players. Magna, the IPG Mediabrands unit, says this advertising will climb 15% next year to the same level as the addressable advertising -- $3 billion in 2020. Magna says it will represent 7% of the overall TV ad marketplace.
What is the downside with “nonlinear”? Many say the lack of unified TV measurement and metrics — viewers, key performance business indicators, or other comparative data — is a major factor. “Reach” for this specific platform is also an issue.
Magna says national TV will sink 3.3% this year, dropping $1.4 billion from the 2018 level of $42.7 billion, and another $170 million in 2020 — a smaller decline due to rising political and Olympics revenues that year.
Local TV is sinking 18% this year from $22.1 billion -- down $4 billion from 2018.
So where does all this money go now? For many, conventional wisdom says it continues with competing digital platforms — including digital video. Magna says digital video will grow another 20% this year to $13.7 billion.
The real question: If future wisdom — and actual ad dollars — shift to more friendly, TV company-focused addressable or nonlinear TV advertising, is that a positive message for both TV owners and their advertising clients?
There have been so many "futures" for "TV" advertising. A while ago, we were told that programmatic or automated time buying would yield advertisers "undreamed of targeting efficiency". Then came "addressable TV" and its cohort, "advanced TV", with "big data" close behind. Ah, but let's not forget those 6-second commercials that are capturing everyone's interest and, of course, the incredible rise in smartphone video usage and OTT, etc, etc. The truth is that everything has a place--when it can demonstrate that it really does what it promises to do---at a fair cost. But "TV" is far too big, with far too many players and types of content for any single innovation to be its "future"---and that includes "addressable TV".