The evolution of addressable consumer targeting means that television could deliver valuable business outcomes across the full marketing funnel -- from brand awareness to sales activation.
But seminal research from Binet & Field for the IPA Databank recommends a balanced approach between long- and short-term strategies of roughly 60/40, given that reach remains essential for long-term growth.
TV is certainly offering new value for marketers, and the industry believes that addressable TV will deliver a deeper level of personalization, resulting in greater relevancy and attention for TV advertising. But is this true from a scientific perspective?
For the last decade, MediaScience has been testing the performance of TV/video advertising formats in long- and short-term messaging applications across traditional TV and digital platforms.
Based on a series of controlled lab studies on category-baed targeting, we have produced insights in five key areas. These may run counter to conventional wisdom, but are essential to understanding the value and limitations of addressable advertising:1. Addressable advertising does not improve ad recall and brand recognition. Even when controlling for factors such as program liking, brand familiarity and brand category relevance, there is no significant difference in ad recall or brand recognition influenced by category relevance to a viewer.
2. Targeting and relevance alone does not affect ad engagement or reduce ad avoidance.In general, ads for product categories relevant to the viewer do not affect engagement or ad avoidance. Only when the category is highly relevant and the need is very timely can addressable ads reduce ad avoidance.
One key insight for advertisers is that likable ads, brand familiarity and optimized frequency are essential to gaining engagement and mitigating ad avoidance.
3. There is no difference in addressable ad effectiveness in a cluttered vs. a limited interruption environment.
In evaluating ads that were highly relevant and “in-market” and ads that were of low or no relevance, we found that limited interruption produced no significant difference in ad avoidance, ad liking or attitude toward the brand across ad types. Another insight was that ad liking and brand attitude explained more than half of the total variance in ad avoidance, while rated relevance explained less than 10%.
4. Optimizing frequency for addressable ads is critical -- especially for new and unfamiliar brands.
Brands that are highly familiar or repeated are more likely to be seen and more likely to improve brand measures, but managing excessive frequency in short periods is critical as this can increase ad avoidance and erase all benefits.
The best conditions for addressable advertising occur when familiarity and optimized frequency are combined with ads that are targeted using timely consumer information -- same day or less.
5. Regardless of which screen it is, behavioral targeting does not produce higher ad engagement.
Whether on TV or a personal smartphone, ads targeted for product categories more relevant to a viewer do not stimulate more attention or more emotional response than standard ads. There is also no difference in memory between moderate and high relevance ads. Creative matters more than relevance.
It's clear that consumers do not ignore ads from non-relevant categories, nor do they favor targeted ads from relevant categories.
What is clear is that ads for categories and brands we use may be easier to process or remember, but attention and the enjoyment of ads are more attributable to creative quality than relevance.
So, video ads seem to have the ability to gain the attention of more than just the "most likely" viewers, which is good news for advertisers that need to strengthen their brand.
It's more important for an ad to be "good" than "relevant." Our research suggests that advertisers should not pay a premium for targeting ads based on the hope of higher engagement.
Instead, premiums should be justified in terms of efficiency, extra reach and less waste.
Good article and interesting updated findings, Artie. Many years ago I got a peek at the results of a huge nuumber of telephone based 24-hour commercial reecall studies done for an advertiser with 15-20 packaged goods brands. Subsequent research verified my observationsw.The point that struck home was that proven message recall scores were only 20% above the norm among brand users---as opposed non-brand users. I interpreted this as an indication that most commercials served as an affirmation of the consumer's own brand selection--reinforcing that decision---in effect. However, it was clear in this rather extensive data set that many non- brand users were also effectively reached by messages from other brands.
While I continue to see merit in the kinds of targeting that "addressable TV " advocates keep promising, I believe firmly that the way to get at this is not simply by "reaching" product category users but trying to do that in the context of how the ad is hopes to get its message across and the mindset---or sets---it is appealing to. Some ads promise specific benefits ranging from superior efficacy to a lower price or ease of use, handy or extra safe packaging, products that are good for your health, the environment, products that are the last word in technology, or the height of fashion, etc.etc. These mindset appeals are hinted at by demographics but are not the domain of any single sex, age or income group. They spill across demos and can not be so easily defined as all adults aged 18-49 with incomes over $50,000.Which is why so many TV advertisers see no need to go beyond obvious targeting metrics---like men or women or very young vs very old---which they can do now via traditional media buys, but otherwise allow their ads to single out their own audiences within the larger numbers of folks that are exposed.
These are good points Ed. There are clearly specific roles for emotonal and rationale messaging through the funnel - to build long-term brand equity with emotion and also to nudge short-term sales with motivation. Our data is simply telling us that marketers should not assume that addressability based on product relevance is a magic panacea for engagement with TV advertising. Good ads can impact all consumers. So while addressability is a great advancement for efficiency in targeting, marketers should leverage that capability for a balanced approach - including reaching light and non-buyers in the category which are key to growing market share.
Thank you for sharing the insights, Artie. If it's okay with you, I was wondering how many observations where included in your controlled lab studies. Is it possible significant differences weren't found possibly due to studying a small number of observations? I was also wondering if findings may be different in real-world scenarios, vis-a-vis the lab scenarios. Lastly, to what extent did the studies take into account buffering in the digital environment that may not exist in the TV environment? While there may be a lag time in running addressable commercials in TV, I'm not sure how that compares to targeted ads in digital, because the lag will depend on the tech, and buffering/load time of commercials will affect whether or not a percentage of viewers will tune out during the ad or even end the session/channel switch before the commercial has a chance to initiate. Thank you very much. One final point--I was wondering to what extent non-targeted ads in your experiments were successful at targeting. Even though they are not designed to target in the same manner, they still have a degree of success targeting the consumer segment. Look forward to hearing from you.
Craig, here are some answers to your questions: 1) In terms of observations, I can tell you that the sample sizes we use in our studies exceed the acedemic recommendations for controlled experiments such as these. Furthermore, I should emphasize that these findings are the result of several studies done over time that have consistently replicated results - giving us a high level of confidence in the findings. 2) It is true that real-world scenarios can change conditions. These conclusions are based on what happens when consumers are known to be exposed to different categories of ads based on varying levels of consumer relevance and in-market status. Across these studies we also tested different conditions including repeated addressable ads and addressable ads within limited interruption formats. Again, the fact that the results have been replicated over time gives us great confidence. 3) We did not test the impact of buffering. 4) Finally, the success of non-targeted ads is probably the most important conclusion. Consumers generally do not ignore ads from non-relevant categories nor do they favor targeted ads from relevant categories.