A hybrid world: Programmatic and addressable TV

Arvind Hickman
By Arvind Hickman | 7 August 2017

This is a free excerpt from AdNews print magazine August edition. You can download a digital version of AdNews and subscribe to the premium print edition here.

The next evolution of TV advertising combines the brand building power of TV with the targeting smarts of digital. AdNews investigates whether addressable TV advertising can get a jump on digital and how far off the technology is.

The ability to “marry everything that is great” about TV and digital is not only the next evolution of television advertising, it’s a vital step in TV’s battle for fragmented media budgets.

TV audiences have been in slow but steady decline — not the doom and gloom scenario of naysayers — but the medium is under threat. As large chunks of advertising budget are siphoned out of traditional channels and funnelled into the digital duopoly of Facebook and Google.

According to PwC’s latest Global Entertainment and Media Outlook 2017−2021, free-to-air TV advertising is poised to contract from a $3.7 billion market in 2016 to $2.9 billion in 2020 – a 4.7% compounded annual decline. Over the same period, digital ad revenue is forecast to grow from a $7.1 billion industry to $10 billion.

Driving this growth is mobile advertising, predicted to increase 25% annually over the next five years, and online video, forecast to grow 23.8% over the same period. Facebook and Google account for 85−90% of growth in digital and are dominating the online video space. TV networks realise they are “under attack from all different directions” and change is required.

MCN’s chief data officer Mark Brandon told AdNews TV needs more of a “targeting story” that will allow it “compete toe−to−toe with the digital majors who are attempting to eat our lunch”.

“It’s about finding that balance between preserving the value of television, which is to some extent about its positive wastage capabilities, versus the opportunity to drive a more granular targeting proposition, remembering that television isn’t a one−to−one targeting medium,” Brandon explained.

“We are not looking to target individuals. It’s all about audience segments.”

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