Along with CTV, addressable TV advertising is being groomed to be a key solution to marketers’ ongoing struggle with reaching target audiences cost effectively as traditional linear audiences decline.
But no one said it was going to be easy to make addressable both scalable and sufficiently accountable, particularly for national ad campaigns. And it’s not.
During a webinar hosted this week by BIA Advisory Services, panelists from the agency, network, MVPD and measurement sectors acknowledged that while much progress is being made through a number of intensive efforts — including the On Addressability initiative launched in 2019 by Comcast, Cox and Charter — the challenges posed in trying to layer new addressable approaches onto traditional practices are going to require considerably more time and concerted focus to resolve.
On the upside, the numbers paint a positive picture of addressable’s reach potential.
According to Mitch Oscar, director of advanced TV for USIM and moderator of the session, cable companies currently have 29 million linear addressable households and 37.8 million ad-supported video-on-demand addressable households; satellite MVPDs have nearly 22 million linear addressable households; and telcos and vMVPDs have 4 million and 2.3 million linear addressable households, respectively.
After deduping, that comes to about 53.7 million linear and 37.8 million ad-supported VOD addressable households across MVPDs and vMVPDs. Combined, that’s 66.2 million addressable households.
Further, the emergence of sales groups for MVPDs’ addressable linear inventory over the past couple of years has eased the formerly cumbersome process of having to go to individual MVPDs to negotiate impressions, coverage, data definitions and CPMs to put together campaigns, Oscar pointed out. The dominant groups include Ampersand (representing Comcast, Cox, Charter/Spectrum and Verizon Fios); Dish (Dish and Sling TV); and Xandr (DirecTV, Altice USA and Frontier).
National is the proverbial Holy Grail at this point, and all of the panelists described efforts to tackle the “speed bumps” that lie between here and there.
Larry Allen was tapped for the newly created Comcast role of vice president/general manager addressable enablement, a job dedicated to centralizing and aligning various Comcast business units around addressability. Comcast has been offering addressable local inventory for years, but with Allen on board, is now leaning into enabling national networks’ programming inventory on its footprint.
Like other MVPDs, Comcast uses some of the 2 to 3 minutes per 60-minute network program allotted for local cable operators for its own promotions, sells some to local advertisers, and makes the rest available for sale for national campaigns. “There’s a high degree of interest from national networks,” Allen confirmed. “We designate a certain number of those units per day for addressable insertion, and within those local few minutes, we make decisions at the household level to insert specific campaigns by unit for local advertisers or national sold by Ampersand.”
Tom Ziangas, senior vice president, research and media insights for AMC Networks, said that from a macro perspective, the company’s reason for pushing into addressable is simple: “We’re trying to understand the future and how we dive into a thought pattern that is not entrenched in the historical way of doing things.”
AMC knows that success will come down to understanding the consumer journey and how to reach the consumer in a way that’s most effective for the client — but achieving that takes extensive work and cooperation with partners involved in every aspect, including networks, agencies and marketers, and measurement firms, he stressed.
Canoe, an ad-tech company which for the past eight years has been working with AMC and other networks to enable streamlined integration with MVPDs, mainly for national ad-supported VOD, is now serving the same core function for On Addressability, said Chris Pizzurro, vice president global sales.
But On Addressability — which just this week announced that Discovery, Inc. is joining AMC Networks in offering inventory (AMC is also part of the OpenAP initiative) — is focused on offering dynamic ad insertion on both linear TV and VOD delivered to aggregated household audiences across the cable television footprints of Charter, Comcast and Cox.
Canoe, through its handling of ad trafficking for On Addressability, provides data at the ad-view level back to the MVPDs and networks in the initiative, while Comscore supplies consumer-view metrics.
Comscore (previously Rentrak) has been employing “massive” data from MVPDs’ set-top boxes to report on ad-supported VOD since 2004, and began measuring local addressable linear performance in 2012, making it the dominant measurement force in both sectors, pointed out Oscar.
“One of the key elements of addressable measurement is the ability to process individual STB household by household viewership and ascribe which of those views was legitimate and not,” said panelist Prasad Joglekar, Comscore’s senior vice president and general manager TV, cross platform products.
Comscore provides daily or even hourly reporting back to the MVPDs, who then pipe that data into their own trafficking systems for attribution reporting on the back end.
Whether it’s linear or ad-supported VOD, agencies and marketers agree that being able to measure and analyze performance on an individual household level is one of the biggest benefits of addressable.
A “one-to-one” household view is “absolutely critical and increasingly so,” said TS Kelly, senior vice president and head of impact at Carat.
However, Kelly added, it is “still only one piece” of the picture. “We still have to go through a reconciliation between non-addressable and addressable homes across different markets and different mixes and match based on geography. It’s still a bit of a patchwork.”
“The measurement mantra is that we want to be able to put it all together, including linear and non-linear,” and having that capability would make by-household performance more valuable, Kelly said.
AMC Networks would “love to be in the national addressable business at the scale of local linear,” but the current need to use linear surrogates for advanced targeting in addressable is a barrier to true national addressable in which different audiences could be targeted with different messages, said Ziangas.
“If we could segment out some of the ad creative to make it more impactful, we’d love to, and we’re all working toward something like that — but it’s easier said than done,” he said. “From a technical perspective, it’s very different than broadcasting, so it does take a lot of time and effort and coordination.”
Issues include whether to cover up the national ad with levels of versioning, and whether to use some of the network’s promo time to do that. “Yes, that’s something we’d like to do,” he said. “But what is the impact from an infrastructure perspective, and how do we handle it operationally? How do we sell it and measure it? The questions are simple, but the answers are very complicated. But we’re all learning, and at some point we’ll get to a place that makes more sense.”
Comcast’s Allen agreed. “There are a number of steps involved in getting to scale and a workflow that’s manageable at that scale,” he said. “Our work with Canoe is all about providing consistency and at least a scaled footprint for addressable. The learnings are really around what are the sales strategies that the programmers want to deploy within that enabled footprint.”
“Versioning is certainly one of them, but we work with other programmers that are basically skipping versioning and going straight to splitting a single avail across multiple advertisers in an effort to drive more yield out of a declining inventory pool," he added. "That’s where I think a number of programmers really see the longer term value of addressable — not only making the inventory work harder for their client by segmenting the audience and delivering specific messaging for a specific advertiser, but also making the individual unit work harder from a revenue generation standpoint, which is critical.”
The current measurement and verification methods being used are acceptable at present, “in the current form of addressable and within the limited inventory that’s been lit up,” because addressable is new, said Kelly.
“But generally speaking, I think we believe that for addressable to scale for a national programmer across many units an hour, that verification and a third-party validation is required. And the most important reason it’s required is that [marketers] need to be able to understand addressable’s impact on the legacy currency that they’ve sold on — meaning a demo.”
Oscar asked about the measurement challenges posed when a portion of a linear TV network ad's audience is served to addressable households for one client and the rest is served to the non-addressable audience for one or more different brands.
“That’s the crux of problem that needs to be solved for addressable to be scaled, and Comscore is making strides to solve it,” said Joglekar. “We believe the only way to solve it is to measure data from individual STBs at scale, and then use that to provide the reconciliation you bring up.”
A key is being able not only to report impressions for the addressable delivery back to the network, but being able to tell the advertiser getting the non-addressable audience about the characteristics of that audience, so that the advertiser doesn't feel that the best impressions went to the advertisers reaching addressable households, he said. “Those are data points that Comscore as an independent third-party currency is using STB at scale to make available both to networks and activation platforms like FreeWheel, so that decisions can be made and planning can be done,” he said.
Ziangas said that “some kind of hybrid” of STB data and panels is needed. “Comscore has already started their own panel to inform what you don’t get from STB,” he noted. “I’m a big believer right now that you need the best of both. One or the other will not be sufficient. Comscore is best in regard to what they do in the STB world, and I still believe Nielsen does a good job on the panel side.” Nielsen is also getting more involved in MVPD data due to its local efforts, he noted.
Kelly, while giving Comscore and the addressable initiatives participants credit for tackling measurement issues, stressed that if ad unit delivery is part addressable and part not, marketers need to be able to understand the impact on traditional ratings.
“We’re all driving at a people-based approach, but when we’re talking about TV, we’re still talking about buying in programs, in dayparts, types of environments and so forth,” he said. “So the reconciliation isn’t just about that number; it’s also about the sales process — some of it being dynamic versus bought upfront.
“We’ll have to change the buy and sell process as well as the measurement process,” he continued. “It’s not just about makegoods; it’s about losing specific audiences in specific places. It’s a challenge from both a buy/sell perspective and a verification perspective. What Comscore is doing is very important, but when you need to have some kind of consistency and verification across an entire campaign, it’s a challenge to do reconciliation.”
Promising as addressable is, it will take time to resolve tough issues like reconciliation, he concluded.