Advertisers are clamoring for a world in which it’s possible to target ads by household across all TV platforms and devices, including all live linear TV inventory.
But with so many players and differing platforms, technologies and standards, getting all of the pieces in sync can seem overwhelming.
The good news: One expert who recently spent a year studying what it would take to achieve universal addressability has concluded it’s not only possible, but “within reach" -- if the players involved agree to cooperate in a few critical areas.
That may sound like a big “if,” but “the promise of addressable TV advertising is so great that the hurdles are worth tackling,” says Tom Morgan, principal, Mediad.tv, a premium internet television services development consultancy that works with clients based in a variety of traditional and nontraditional TV platforms.
Morgan, whose experience in digital and next-gen TV includes having served as CEO of Net2tv and chief strategy officer of Move Networks, has summarized his analysis in a white paper called “The Three C’s of Addressable Broadcast TV.”
Morgan is quick to stress that his study is focused exclusively on the front end of this issue, meaning the technology and standards.
“In my view, the business-related issues, such as inventory control, profiles and sales, may represent tougher challenges than the technology issues,” Morgan tells ATV Insider. “But I wouldn’t presume to get into those. What I’ve done is lay out what needs to happen on the front end to turn a bunch of walled gardens into a ‘federation of states’ capable of delivering addressable reach at scale.
“TV is all about scale, but right now, about 80% of the inventory isn’t addressable,” he adds. “Having the scale capability in place first is critical to realizing addressable’s revenue and growth potential.”
Morgan says that, given mounting advertiser demand, MVPDs already realize the need to cooperate on the systems, tech and standards end, and are showing increasing support for universal addressability. He also points out that smart TV OEMs are likewise moving to support such functionality.
“Suddenly, management of addressable TV has become an industrywide issue,” he notes.
Since addressable TV is already a reality for fixed one-minute local avail breaks in cable networks, “the technology associated with delivering addressability at the household level has already been proven,” Morgan points out.
“However, scaling this business to empower all types of TV ad inventory will involve some more advanced approaches to controlling which ads are enabled, how the insertion process is managed, and how the targeted ads are stored on the smart set-top box, smart TV or other TV device,” he sums up.
He identifies three core challenges that must be addressed (so to speak) to expand addressable to the full inventory:
*Establishing business relationships among the broadcasters, cable networks, syndicated programmers and addressable smart TV distributors and smart STB-capable MVPDs.
*Establishing necessary signaling to enable the seamless replacement of the underlying broadcast ads.
* Establishing adequate reporting, measurement and audit capabilities, so that there is transparency and trust in the system.
“But most important, this emerging industry needs to coalesce around some open standards that allow for scale, cross-platform consistency, measurement and yes, increased ARPU (average revenue per unit),” Morgan stresses.
“The initiatives supporting ATSC3.0, the Nielsen/Sorenson ACR efforts, and Project OAR need to support a common approach to control, clock and cache — what I’ve dubbed ‘The Three C’s.’”
These groups are “all looking to tackle the exact same problems from a logistics standpoint, and if they want to compete in ad management or measurement, then fine. Just don’t logistically fragment the industry before it gets off the ground,” Morgan urges.
“The best bet is an open-standards approach based on full integration and signaling from the inventory owner to the smart device,” he writes. “How different vendors solve specific implementations is not the issue, and nothing here implies that any vendor cannot build a standards-based solution.”
It’s time for all parties to “start rowing in the right direction” he concludes — adding that he’s confident that once the technical scale capability is in place, media owners will come to agreement on business-side models that open up addressable’s potential for advertisers.
While it’s not feasible to get into all of the specifics that Morgan clearly lays out (in a way that non-techies can understand) in the paper, I would certainly recommend checking it out — and would hope that some of you will take a minute to comment here after you’ve given it a read.
The white paper can be downloaded here. A full report version is also available through analyst group TVRev.