Addressable Television Advertising… What Is It and How Does It Work?

Addressable television advertising is the ability to show different ads to different households while they are watching the same program.

Ads are targeted to viewers based on data collected by the advertisers, whether it be based on demographic information, viewing selections, or other trackable behavior.  As a result, specific ads are shown to specific households that other households may never see, including customized ads for automobiles, insurance, or financial services.

Addressable advertising as a sales tool is growing rapidly. Over the last two years, advertising spend in addressable advertising has increased from $2.1 billion to $3.3 billion, and over half of those who are now doing addressable advertising say they will increase their spending in the future.

While many see the advantages of being able to target specific ads to specific viewers, there are also significant drawbacks, especially issues over privacy. Remember the ads are based on data the advertiser learns about you!

Surveys show that consumers want messaging that is more relevant to them — ads that create an emotional connection. Addressable ads meet this need — and by all appearances they are effective.

One study showed that 72% of viewers of addressable advertising recalled seeing the ad, 66% learned about a new product or company, and 46% interrupted the ad to do research or buy the product. Addressable advertising can bridge the gap between traditional linear television and some of the newer services, delivering ads to those who would normally tune out.

Some of the disadvantages include the fact that measurement of the data is still not clear cut and the cost to the advertiser is sometimes 200-300% higher than online video platforms.

Another major concern is privacy. Many members of the general public, as well as regulators, are concerned about advertisers overreaching. Advertisers can exploit advertising to discriminate against certain people by preventing them from seeing certain types of ads, for example, housing, or credit, or jobs. Other consumers can be specifically targeted with predatory ads like payday loans.

According to a recent study, 39.4% of consumers say they’re uncomfortable with any establishment using their personal information for marketing purposes.

So, there’s a give and take to addressable advertising. As a tool for reaching the right person with the right message, it can be invaluable. But used wrongly, it can be a weapon to discriminate.

Understanding the fine line that addressable advertising must walk, having a media buyer who is ethical as well as knowledgeable regarding industry standards and current government regulations, helps to make the ad buying process safer and pain-free.

Let Infinity Concepts help you with your advertising needs.
CLICK HERE or call us today at 724.733.1200 X26.

Paul McDonald

Media Director at Infinity Concepts
Paul negotiates and coordinates all media buys and provides related reporting and analysis.
Paul McDonald
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