I was particularly fortunate to speak to the Media Association of Pittsburgh last week on the present and future of advanced TV advertising.
I say “particularly” fortunate because I’m originally from western Pennsylvania (grew up in a small coal town in the mountains two and a half hours north of Pittsburgh), and I love getting the chance to visit the “big city” of my childhood.
After a warm-up session deciphering the alphabet soup of acronyms in the category, terms like AVOD, ATV, PTV, DDL and CTV (a good subject for a future column), I talked about the various flavours of advanced TV advertising today:
- Linear addressable, which leverages infrastructure at some cable and satellite companies to deliver unique ads into some of the local ad pod positions on some of their set-top boxes.
- Data-driven linear, which uses data, science and software to optimise campaigns on an audience basis, to reach specific types of people or to drive particular outcomes.
- AVOD/OTT, which delivers ads, many of them targeted, into the streams of video services like Hulu, ESPN+ or CBS All Access.
- Connected TV (CTV), which delivers digital ads into apps or streams on TVs connected to the Internet, which can appear as anything from banners in electronic programming guides, YouTube videos or inventory on premium programmers’ content through streaming devices like Roku or Amazon Fire.
I was asked if there was a characteristic that set any of them apart from the others.
I said that when it comes to scale, data-driven linear is significantly separated from the rest. A data-driven linear ad campaign can theoretically reach any and all audiences watching linear TV at any point in time — hundreds of millions a day.
Meanwhile, all of the other techniques are limited to much smaller subsets of the total US population.
Only tens of millions of households in the U.S. have set-top boxes that can be targeted within, the same for the number of TVs that are connected or the number of people that regularly consume ad-supported video streaming services.
Clearly, usage of each of those techniques is growing. Each also differentiates themselves in being able to deliver more precision with their ad deliveries.
But when it comes to reaching lots of folks quickly — or ever — with something more akin to digital-like precision, nothing compares to data-driven linear TV advertising.
As you can imagine, a potential reach of 10 or 20 million homes over a month might sound like a lot, but once you start adding targeting filters that narrow the target down to 15% or 20% of those, you’re now talking a campaign reach in the single digital millions. That’s quite different than data-optimizing your linear TV ad campaign that might optimally reach 35 million homes in a week, out of a potential reach of 110 million.
Does scale really matter when it comes to advanced TV advertising? Isn’t it still in the ‘proving itself’ stage?
For sure, many brands and advertisers are still new to advanced TV and use it for testing. And many smaller, emerging brands have no issues with the sub-scale limits of the addressable forms of TV advertising since they value the precision more than scale. However, data-driven linear advertising stands out for large advertisers who need both more precision in their targeting but must have massive scale.
What do you think? Does scale matter in advanced TV advertising today?
Dave Morgan, a lawyer by training, is the CEO and founder of Simulmedia. He previously founded and ran both TACODA, Inc, an online advertising company that pioneered behavioural online marketing and was acquired by AOL in 2007 for $275 million, and Real Media, Inc, one of the world’s first ad serving and online ad network companies and a predecessor to 24/7 Real Media (TFSM), which was later sold to WPP for $649 million. Follow him on Twitter @davemorgannyc
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