Will 2020 Be the Breakout Year for Addressable TV?

The panel was unanimous in seeing COVID-19 as having been a positive influence on OTT (aka streaming) and CTV (Connected TV), two forms of addressable TV that can be bought programmatically, and whose audience increases during social distancing have outpaced the overall rise in television usage, and have remained high even as the total TV levels have returned to only about 3% above normal.

As Jamie and I explained at the outset, the field known as Advanced TV consists of the latter two forms of addressable TV, plus MVPD Addressable, and Data Driven Linear. Data Driven Linear consists of a variety of players offering deterministic targets and measurability at a notch above television in general. MVPD Addressable is the stuff that my company Next Century Media started in the 1990s and took a long time to start to scale up. It uses set top boxes as the switching mechanism for replacing default in-line commercials with the ones that are optimal for the household from the standpoint of the advertisers.

Jack asked the panel why had it taken so long for MVPD Addressable to grow in ad revenues, especially as compared to its OTT and CTV cousins. The three other panelists all put their fingers on it. Kevin was the first to use the key word "interoperability", meaning that agencies want a one-stop shop like programmatic where it can be easy to buy addressable audiences across all the MVPDs, hence making it a national rather than geographically skewed medium, without heavy lifting.

Jamie pointed out that this is what Cadent is, the folks who do the heavy lifting so the agency doesn't have to, making Cadent the one stop shop.

Marcien and Kevin both revealed that their companies are already working on deals with major broadcast and cable networks to make addressable their huge pools of network ad inventory as well as the VOD and 2 minutes every hour on every cable network that is the less extensive MVPD inventory. I commented that these are indeed the factors needed to unlock the giant revenue potential of MVPD Addressable – and were what Next Century Media was attempting to do but without the clout of a Comcast or a Dish.

Marcien and Kevin were candid in spelling out the hurdles in getting MVPD Addressable this far, and agreed that 2020 is stacking up to be the year when the interoperability deals and network-inventory deals will probably unlock the sleeping giant, estimated by various parties at a $15 billion to $30 billion per year advertising revenue business once at saturation. Marcien said that the technical hurdles were now behind us and all that is left is the art of the deal – and that the revenue share splits between MVPDs and networks were now going on with far greater ease than expected based on how difficult it had been back in the beginning.

Why would it ever grow so big? ROI is the answer. I reported to the panel the recent FOX Bill Harvey Consulting study which shows that network TV programming addressable OTT CTV has the highest ROI of any TV or digital media, higher than linear TV and much higher than any form of digital. Jamie exclaimed how unsurprising that was to her, given the viewer experience, the addressability, the lack of fraud, the lack of viewability problems. Marcien added the hard targeting data advantage MVPDs have as compared to cookies.

The panel was also unanimous on the need for collaboration to keep up the momentum toward greater and greater interoperability in serving addressable commercials and in measuring their audiences and business outcomes. Jack pointed out that MediaVillage has made "US" the word of the year, meaning that the rising lake will lift all ships to the degree that we work together to make television as effective and measurable as it can be, rather than trying to steal share and glory from each other.

Jack expressed a concern that addressability could be used in an exclusionary way – implying advertisers targeting general population audiences to the exclusion of minorities, affluent rather than those with less disposable income. I said that self-interest would work against that exclusionary scenario – that addressability and targeting in general is most effective when targeting specific types of purchasers and people whose motivations align with those in the ad itself a la RMT, and least effective when using demographics. Jamie added that other behavior-based data abounds and is more ROI effective than demographics. Marcien and Kevin reminded us that there are also laws restricting the way targeting can and can't be used, providing a further bulwark against exclusionary use of addressability.

Toward the end, Jack asked me to report on my latest company, RMT, and I explained to the other panelists that RMT codes ads by the motivations in those ads, and uses that to help advertisers and agencies add more positive intensity to ad impressions by targeting people whose motivations align with the ad, and placing the ad in program contexts that align with those ad motivators. I commented that we are able to use this programmatically by whitelisting networks whose programming aligns with the specific ads, and that one day we are hoping we shall be able to do this at the program level, for even greater ROI lift from context effect. I mentioned that Marcien's company Freewheel is one of the players that is offering RMTech to advertisers and agencies, as is a4 and Hulu.

At the very end, I said there is one more advantage to addressable TV, that just like digital it is capable of doing Random Control Trials, which are far more accurate than any other method of measuring ROI, because they measure causality of incremental sales, not correlation with all sales adjusted by models. And I said, "Look out for a big announcement related to this by the ARF next month."

So much more information came out before and during the panel, and Jack did not get to ask even half of the questions he sent us all in advance. As a result, in my next MediaVillage post, I'll report on the Infrequently Asked Questions and my Answers to them regarding Addressable and Advanced TV.

Also Read:

Is It Now or Never For Advanced TV? Collaboration Will Tell Us by Charlene Weisler

A United TV Advertising Front, and How to Start It by Simon Applebaum

Media Experts Agree, 2020 Is a Decisive Year for Advanced TV by Nathan Holman

Addressable TV: On the Cusp of Going National Scale by Jeff Minsky

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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.