“Hey, that one Super Bowl commercial last night was amazing.”
“You know, the Mr. Clean dancing commercial?”
“Nope, I was never shown that one.”
Welcome to the future, where different viewers watch different television commercials based on their unique patterns and preferences. While my Super Bowl example is an exaggerated take on the future of targeted advertisements, is this type of dialogue really that far off from becoming part of our future? By now, most of us are aware of ad targeting on search engines and social media sites, especially Facebook, Instagram, and now Snapchat–those personalized ads that follow you from site to site displaying the new speakers you’ve been wanting. But what might surprise you, and what I find interesting, is that social media is just the first step, and television could be next.
Evolution of TV Advertising
The evolution of TV has changed drastically in the past ten years, especially with the introduction of streaming media around the mid 2000s. While in the past you were limited to watching certain shows and channels when they aired, today we can watch shows on a number of different devices whenever and wherever we want. That being said, when families do watch TV, I want to refer to an example from Think with Google:
“Imagine a family of four watching a football game, with parents watching on the living room TV, college-aged son in the basement watching with friends over a game platform, and little sister keeping an eye on the game on her phone while getting her book report done.”
Google makes the point that while traditional ad buying on television reaches a large audience, it is most likely not going to be relevant to every person watching the ad. The goal moving forward, and what we are going to see continue to evolve, is how to reach different devices and households with more effective messaging.
Addressable Television Advertising
Many companies have been talking about the future of personalized television advertisements, or addressable advertising, for the past few years, but this future might actually occur more sooner than later. In fact, some of these addressable television ads do exist today, but at a small scale. In 2016, targeted television ads consisted of 1.3% of total television ad spend, even though around 50 million, or ½ of households who pay for subscription, can be targeted. This year, companies like AT&T and Times Warner Cable suggest how addressable television advertising will increase due to their $84.5 billion acquisition last year, which gives them access to more customer data and a larger target audience. The two CEOs believe they can accelerate the growth of addressable advertising with their new combined content, scale, and distribution. However, we will have to wait to see if and how fast this acceleration takes places since privacy concerns exist, along with some restrictions. For example, AT&T can currently only use addressable advertising within two minutes of every hour on cable programming. Even as television ad targeting increases with these two large companies, a problem arises if advertisers do not want to place ads for only AT&T or Times Warner customers. Furthermore, as smart TVs and online streaming becomes even more popular, using digital marketing tactics might end up being more effective.
How it Works
Addressable advertising works similar to online ad targeting, with the goal to bring effective digital advertising techniques used on the Internet to TV. Addressable advertising includes a number of factors different from simply age, gender, and geography; these include income, family composition, preferences, and buying patterns. Technology allows TV ads to correlate individual preferences and patterns with use on other devices, such as smartphones and laptops. With the advent of being able to watch any show on any device at any time, companies have the opportunity to collect data on what people enjoy and display the right message that aligns more in tune to their interests. From an advertiser’s point of view, this new type of addressable TV advertising allows them to measure metrics more effectively on each ad, including engagement, conversions, and brand lift. What is really interesting is the type of information that can be analyzed when watching television, including if you shared a post or article during a show, or even looked up the product from the advertisement on your smartphone.
Contrary to what some think, the benefits of addressable TV advertising are not to annoy viewers, but to create better, more personalized experiences, while marketing relatable products you actually care about. Some other benefits include more engagement, but can also prevent viewers from watching the same commercial over and over. With traditional TV advertising, companies generally buy slots to show their advertisements on certain channels, which is why you might keep seeing the same furniture commercial over and over on HGTV. In contrast, addressable advertising can track how many times someone watched an advertisement to hopefully prevent this repetition from occurring.
Opponents of addressable TV advertising argue that what’s great about traditional television is that it offers a medium for companies to spread awareness to the largest amount of people. While traditional television has provided this medium to reach multiple users, proponents of ad targeting suggest that not everyone is in the market for the same product, such as a new car for example. Wouldn’t you like to spend money on effective advertising that targets the right buyer personas who are more likely to turn into leads and purchasers? Another concern is that as TV advertising becomes more like the Internet, top competitors like Facebook and Google will fight to become more like TV, which is why you might have noticed more videos and ads recently on YouTube and Facebook videos.
While I doubt addressable advertising will affect Super Bowl commercial slots any time soon, I am curious to hear if people feel open or against the idea of receiving personal advertisements while watching television. As an undergraduate student about to start working in this world of digital marketing and advertising, I am both interested and excited to see what happens with the future of television.