The Power of Advanced TV Advertising: Addressability or Reach Extension?

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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 advertising, this signals a potential shift in strategy away from hypertargeting and toward 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, even though the content is much the same. 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 recent 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. 

Add the problem of over frequency to the negative impact of inaccurate targeting, and advanced TV’s addressability loses some of its shine. But addressability isn’t the only value advanced TV has to offer advertisers. When working with budget constraints, extended reach often becomes more important, and more impactful, than expensive targeting.

The Promise 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, since achieving unduplicated reach across platforms requires less granular and more readily available audience data. 

The Trouble with Measurement
Advanced TV allows brands to target unique groups 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 more precise, apples-to-apples comparison – neither of which can ever be truly accurate. 

With the challenge of measurement and its degree of inaccuracy, brands might be better served by thinking more about content, context, and audience composition, focusing on the effectiveness of the creative and timing, as well as on reach.

Trust vs. Targeting
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 useable 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, complying with the rules. 

As we approach a world without cookies, first-party data becomes more important than ever. Collecting first-party data, with consent, 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.

One solution getting a lot of buzz lately is data clean rooms. A data clean room allows advertisers and brands to match their own, first-party data with a publisher’s user-level data without exchanging any personal information or raw data. It sounds great in theory, but data clean rooms have their own drawbacks. 

The advertiser needs to have a solid database of first-party information to start with, and unless they focus primarily on a single publisher, they’ll need to invest in data clean room access for each publisher they use, which can become expensive. For most advertisers, data clean rooms are probably more of a future solution, when the promise of omnichannel data clean rooms becomes a reality.

Data and targeting tie back to attribution, concerning everything about the brand – from brand reputation to conversion. 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 trusted data to have confidence 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 Shift in Strategy
Our economic climate is changing, and the promise of hypertargeting hasn’t quite delivered on its promise. Consumer distrust and ad fatigue are escalating, meaning a significant amount of ad spend is wasted. 

Instead of gravitating towards the shiny new thing, evaluate the complexity of advanced TV measurement and currency, how third- and first-party data availability factor into addressability, and compare the cost and effectiveness of hypertargeting versus the extended, unduplicated reach that can be achieved by complementing broadcast TV campaigns with advanced TV advertising. 

Adapting to the expectations of today’s hyper-engaged, hyper-sensitive consumer is challenging under an avalanche of data from so many disparate sources. But the brands who succeed still see audiences for what they are—human beings looking for shared experiences, not numbers populating a spreadsheet. 

Success in an evolving TV ecosystem requires advertisers to elevate their strategy by shifting their thinking away from the pursuit of delivering the right message to the right person, at the right time, and toward a more inclusive, holistic goal – delivering a common message, to a common audience, at different times.

Will Offeman
Chief Product Officer, WideOrbit

Will Offeman is chief product officer with WideOrbit, where he leads strategy, design, and development of all its software solutions. With decades of professional experience in broadcasting, cable networks, and digital publishers, Offeman focuses on advancing digital and linear advertising. On LinkedIn.