The Near- and Far-Term Future of Addressable TV Advertising

Redefining the term narrowcasting for the digital era addressable TV represents a huge leap forward when it comes to connecting consumers with the specific goods and services that they are most likely to purchase amp160Yes the moneymaking implications of addressable TV advertising are enough to make any marketing professional or business executive drool amp160And the technology is about to get a big boost from the recent ATampampT acquisition of Time WarnerATampampT closed this 854 billion deal in midJune and the US District Court for Washington DC has rejected Justice Department arguments that ATampampT divest its existing interests in DirecTV andor its emerging interests in Time Warneramp8217s Turner Broadcasting System in order to avoid any potential conflicts of interest amp160Generally speaking ATampampT has more power than ever before to push its product line and industry agenda forwardHot on the heels of the Time Warner acquisition ATampampT took further steps to advance the future of marketing through its late June purchase of AppNexus a multinational technology company with software platforms that have revolutionized the way we consume digital advertising amp160In advance of the AppNexus acquisition ATampampT listed addressable TV advertising as a major reason for its interest in the ad tech firmIndustry experts have noted the tremendous opportunities that ATampampTamp8217s recent acquisitions have presented in terms of bringing viable addressable advertising to a wide market amp160As Chief Executive Officer and Principalamp160of the programmatic advisementamp160firm Prohaska Consulting Matt Prohaska says quotThis is the latest move from one of the top publishers to buy not build or partner their own tech and continue the arms race to building the largest deterministic crossmedia audience in the world amp160So many major publishers are debating today whether to join Google Facebookamp160and Amazon in building giant walled gardens or to create the largest open garden amp160We are eager to see how ATampampT39s strategy and execution can work better than Verizon39s and others39 today hoping to challenge the triopoly for capturing larger shares of audience attention and marketer spendingquotIn its current position ATampampT is poised to address many of the obstacles to widespread and effective addressable advertising in relatively short order amp160For example the reach of advertisers in the current market is significantly restricted by the difficult task of stitching together a specific target audience across various service providers amp160When ATampampT gains control over Time Warneramp8217s various networks and media properties many of those limitations will instantaneously disappearOf course the consumer research and data needed to make addressable advertising an industry standard is quite considerable and not without its thorny ethical problems amp160Driven by key media data and analytics tools such as the settop box STB marketers are already gaining more insights into the interests and desires of TV viewers than ever beforeLike the traditional Nielsen TV ratings system STB technology monitors viewing habits to gather data that is directly connected to a physical address and the residents who live withinamp160 Unlike Nielsen which compiles demographic approximations from a sample group of around 40000 families settop boxes reach millions of households to support marketing capabilities that are far more customized and preciseIn short thanks to datacollecting infrastructure like STB networks marketing professionals have been able to predict the precise buying habits of TV households and the individuals within those households for quite some time amp160What we have been lacking is a system to deliver customized advertising back to those households in a manner that is just as precise amp160Modern addressable TV advertising technology offers just such a systemOf course consumer data collection and targeted marketing are controversial issues with farreaching implications amp160As news stories such as last springamp8217s massive Facebook data breach continue to dominate headlines the lack of privacy on the internet continues to raise serious concerns amidamp160the general public amp160Therefore in advance of any serious expansion of addressable TV advertising industry leaders like ATampampT must set forth transparent and stringent data standards providing full assurance to the TVwatching public that the unwarranted andor illegal harvesting of personal information will not be tolerated amp160If the TV industry doesnamp8217t take care to institute and maintain the strictest of privacy standards it will surely fall prey to the same unconscionable data leaks that have plagued the online worldIn fact the TV industry must look to the online world in many ways if it wants to succeed in the modern marketplace amp160For decades now digital marketers have had the ability to target specific ads to specific individuals with a startling degree of accuracy amp160If TV is to remain a viable advertising medium it must find a way to do the exact same thingThe broadappeal Super Bowl commercial will always have premium value but the days when mass reach is king are rapidly coming to a close amp160In order to compete in todayamp8217s media landscape the TV industry must step up its addressable narrowcasting game if it wants to grow more than its low singledigit normamp160

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The Near- and Far-Term Future of Addressable TV Advertising

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Jack Myers

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