Advanced TV advertising: Balancing addressability and reach

With the increasing risk of a major recession, increasing interest rates, and historic inflation, brands are scrutinizing ad spend more closely than ever. When it comes to advanced TV, many advertisers looking to get more bang for their buck are shifting budget away from expensive hypertargeting and gaining a renewed appreciation for reach extension.

Advanced TV includes connected TV (CTV) or over-the-top (OTT), video-on-demand, and addressable TV. Simply put, advanced TV is any form of television that is not traditional, over-the-air, broadcast TV. Regardless of whether delivered by IP address or set-top box, all forms of advanced TV offer advertisers the ability to reach viewers with addressable advertising. And that addressability - the holy grail of one-to-one targeting - has become an advertiser's latest shiny new thing.

But here's the rub: getting personalization wrong alienates the very consumers you're trying to win.

According to a study from ParcelLab, nearly half of US consumers experienced incorrectly targeted ads in the last six months. Of those, 42% immediately unsubscribed from the brand's content, 24% took immediate action to block the brand on social media, and 22% decided not to purchase from the brand again. Budget spent on incorrectly targeted ads isn't just budget wasted, it also negatively impacts brand reputation and leads to lost revenue.

Combine the negative impact of inaccurate targeting with over frequency, and advanced TV's addressability loses some of its shine. But advanced TV has more to offer advertisers than just addressability. When working within budget constraints, extended reach becomes more important, more impactful, and less expensive than hyper-targeting.

The potential of addressability Addressable advertising allows brands to target different households with different ads during the same program. At its most aspirational, addressability even promises the ability to deliver different ads to different devices within the same household. But while addressable advertising can be effective, it still lacks a supportive model that provides value to agencies and advertisers while also delivering a high-quality viewer experience - the kind of experience audiences have been trained to expect from decades of watching broadcast TV.

What was initially controlled by a few prominent broadcast networks and cable TV companies is now fragmented across multiple platforms and service providers, both subscription and ad-supported, each with their own audience data. This fragmentation makes it challenging to know who is watching what and on which platform and knowing that with precision is necessary for effective addressable campaigns.

Using advanced TV for reach extension, however, can be equally or more effective and it's also more affordable, since achieving unduplicated reach across platforms requires less granular and more readily available audience data.

Measurement trouble Advanced TV allows brands to target unique audiences at precise moments. But with increasing fragmentation, measurement can be inconsistent across platforms, providers, and services, as well as between advanced TV and broadcast TV. Advertisers want to know what they bought, what was delivered, who it was delivered to, and what the outcome was. But depending on who's compiling and reporting on the data, advertisers can end up struggling to compare GRPs to impressions to views to completed views, making cross-channel measurement and attribution extremely difficult.

Brands and agencies often find it more advantageous to blend metrics to get an overall picture rather than try to translate measurement currencies and force a closer, apples-to-apples comparison - neither of which can ever be truly accurate.

The trust / targeting balancing act Consumers access content through a variety of methods and devices, each gathering various levels of information about them. No matter how and where the data is collected, the goal for advertisers is to ensure the information is both usable and useful, while maintaining compliance with privacy regulations.

But since data privacy regulations are constantly changing, advertisers should shift their focus toward meeting consumer expectations around their personal data. Consumers will trust your brand more if they believe you care about protecting their privacy as much as, or even more than, you care about complying with the rules. And as we approach a world without cookies, first-party data becomes more important than ever. When collected with consent, first-party data avoids privacy concerns, but the data must be used with care - distrust can still result, and consent withdrawn, if the consumer senses their data has been used in a way they didn't anticipate.

Attribution is how a brand determines campaign effectiveness but most of the data sits with publishers. As a rule of thumb, brands should only serve highly targeted or addressable ads if they have enough trust in the data to be confident in the purchase intent of the viewer. Advertisers concerned about consumer trust who are looking to grow their businesses would often do better to seek out unique, unduplicated reach, via both advanced and broadcast TV, rather than focus on one-to-one targeting.

A balanced strategy The promise of hypertargeting hasn't quite lived up to its potential. Increasing consumer distrust and ad fatigue can mean a significant amount of ad spend is wasted. Instead of gravitating towards the shiny new thing, advertisers should evaluate the complexity of advanced TV measurement and currency and the impact of third- and first-party data availability. A careful comparison of the cost and effectiveness of hypertargeting versus extended, unduplicated reach will lead most to conclude that the most prudent strategy is balance - complement advanced T

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