addressable tv vs linear tv

See our. Linear TV advertising finds its strengths in reach, repetition, and cost, allowing companies to stretch far and wide on the TV ad space for potential customers without sacrificing their budget. Addressable TV, which refers to digital buys for impressions on a specific cable set top box, is a good channel for advertisers to reduce media waste, the research reveals. Linear cable television is a critical aspect of awareness because of its reach and relative affordability. Addressable ads offer the first-ever targeted approach to marketing, which can hone in on specific demographics and offer ROI metrics that help plan future TV campaigns. Nevertheless, hopefully what we present here is evidence that Addressable TV can work, what you can expect the performance to be relative to your Linear TV and how you might use it in your media mix to boost your performance. 1. The size of the bubble is the budget for each campaign. In summary, advanced TV is an umbrella term that encompasses three types of TV advertising: programmatic linear TV, addressable TV and connected TV (CTV). Each bubble on the chart represents a campaign, orange bubbles Linear TV campaigns and blue bubbles Addressable TV campaigns. Traditional 30-second commercials still have a place in U.S. television programming, particularly around high-profile events like the Super Bowl. In the most common form of linear TV advertising, the same TV ad is broadcast to all households watching the same program, and ads can only be targeted based on a program’s age and gender. This can include TV spot placements within cable, satellite, and/or broadcast inventory. According to estimates by Nielsen, there are currently 119.9 million households that have television viewers in the U.S. for the 2018-2019 TV season. Select Accept cookies to consent to this use or Manage preferences to make your cookie choices. This relatively new practice is known as “addressable TV.” Addressable TV uses programmatic technology and advanced audience segmentation to deliver specific video ads at a household level in real time. This custom content builds upon a marketing strategy without repeating what they’ve already shown the potential customer. U.S addressable TV spending is expected to rise by 33% for the next two years. Note that sales driven / scale is investment multiplied by ROI. The orange bubbles (Linear) are all off to the right. But we venture that in many instances there was headroom to invest more than was spent. Innovative addressable TV is designed to streamline and provide a better advertising experience for all - including the consumer. Addressable TV Spending will be growing $3.4 Billion in 2020. You can change your cookie choices and withdraw your consent in your settings at any time. Addressable TV budgets are far smaller than Linear TV The blue bubbles are all, without exception, much smaller than the orange bubbles. It is also known as cable television and in the traditional linear TV, the schedule is delivered to the audience at a certain time via … (Programmatic TV is also referred to as addressable linear if addressable targeting is layered onto the ad.) Real-time programmatic ad serving is great for digital, but doesn’t translate to linear TV. Addressable TV also opens the possibility for brands to target individual households with messages relevant to that viewer and their place in the purchase journey. Addressable TV is the ability to serve different ad content to different audience segments watching the same TV program on IPTV set-top boxes or connected TV sets, based on specific audience targeting. This works well for more niche brands that have a very specific audience. Linear TV is still the backbone of the AV mix. The beauty of addressable advertising is brands and agencies have an opportunity to test and revise, until they’ve found the perfect balance. Through a more advanced linear TV buy, called Linear + at organizations like NY Interconnect (NYI), brands are able to use the reach of linear with the targeting of addressable by creating a media plan that replaces basic demos with audience intelligence. Having this capability gives companies the power and the data to make more targeted marketing decisions both in the advanced TV and basic cable ad space. To emphasise, this is not the definitive view on the subject. “Linear TV often gets overlooked within the context of a streaming war dominated thus far by SVOD giants, but platforms like Samsung TV Plus provide the perfect environment for people who are looking to unwind and unplug,” said David Chu, president of DMR, which he co-founded 10 years ago. An initial targeted ad could introduce a viewer to a product and the story the campaign is telling. With linear TV advertising, though, familiarity can be the tool that converts audiences into customers. Before we get into the terminology, we thought you might like to have a baseline definition for Connected TV to get you started. > Connected TV|Connected TV (CTV) is digital content accessed by apps and streamed over smart TVs, mobile, or OTT devices. This helps brands reach  more people but target a consumer that’s more likely to buy the product. For instance, if occupants have been scrolling through social media content relating to new cars, an automotive brand can run an ad suggesting a test drive at their local … The blue bubbles (Addressable) are mainly clustered in the upper-left quadrant in the chart, representing higher-than-average ROIs. To some extent this reflects the nature of the medium, which focuses on targeting potential consumers with a higher propensity to purchase than the average. Though the capabilities exist, it’s important to note that, presently, the addressable reach of these cable and satellite providers remains small. The blue bubbles are all, without exception, much smaller than the orange bubbles. The second source of pure TV advertising is set-top boxes from satellite and cable companies that offer addressable advertising for either on-demand or linear programming. Linear TV ads only reach 10% of the intended audience on average, meaning that a significant amount of spending is wasted on uninterested viewers. For these latter homes, programmatic advertising is the best they can do. Perception vs. Addressable allows for the creation of very specific audience segments and very specific ad delivery. Linear TV advertising is the cornerstone of any brand’s marketing strategy. Programmatic TV's ROI is on par with linear's. In the first half of 2017, the number of advertisers that ran a campaign exclusively on connected TV (CTV) rose 21 percent over all of 2016. This reach equates to 305.4 million people (ages 2+). They drive a lot of sales and help support the volume aspirations of brands. The above are the main differences between Programmatic TV Vs. Addressable TV. In case you’re unfamiliar, on the vertical axis we have ROI, which is a measure of media efficiency. The AT&T AdWorks product suite includes: Addressable TV Advertising, Data-Driven Linear, Interactive TV and Premium Digital Video Advertising (including DIRECTV NOW and Otter Media properties). This month, I've been exploring the topic of Addressable and Programmatic media and I've pulled together this article exploring how we help clients on this very subject. • Addressable TV leverages subscriber registration data Linear TV advertising finds its strengths in reach, repetition, and cost, allowing companies to stretch far and wide on the TV ad space for potential customers without sacrificing their budget. #marketingandadvertising #econometrics #targeting, This website uses cookies to improve service and provide tailored ads. In particular, there's great potential for brands to improve the traditional TV ad buy by indexing digital audiences against linear TV viewership, also known as data-driven linear. 530 5th Avenue 6th Floor New York, NY 10036 | © copyright 2021 NY Interconnect, LLC | terms and conditions | privacy notice, 119.9 million households that have television, 60 million households and roughly 162.2 million people. Small forays into tactical, targeted media are likely to yield higher than average ROIs (assuming you pick the right media for you and get your targeting strategies right). While addressable TV is technically a form of programmatic TV (they both use automation to serve TV ads), its … Addressable TV refers to the ad inventory available through cable (set-top box) providers, such as Time Warner and Comcast, companies that can present your messages through their linear programming or VOD inventory. If you’re one of our clients you will probably recognise this as a helpful view we sometimes share to illustrate the relative performance of different media channels. For that you would have to scale up investment. Repetition has been a cornerstone of brand recognition since the infancy of television, whether it’s getting a jingle stuck in customers’ heads or providing that instant connection between logo and product. Keynes Digital. 2. The most substantial divide between linear and addressable advertising for businesses is the ROI metrics. As a result, ad spending on advanced TV alludes to more conversions through the all-important marketing funnel by circumventing the masses in favor of viewers that are more likely to buy their product. While its scale is half what the entire market is currently—60 million households and roughly 162.2 million people—it extends reach by targeting audiences that brands believe are their ideal customer. Linear advertising can create a growing storyline, as well, but they can run the risk of a viewer tuning in halfway through their campaign. The chart below tells the story. There is inherent sample selection bias in that the brands who make most use of Addressable TV are precisely those for which the strongest case exist, meaning that they are bound to perform well. If scale comes at the expense of efficiency, the blue Addressable bubbles will end up where the orange Linear bubbles are now, which is not a bad place to be but indistinguishable in their strategic role in the media mix from Linear TV. addressable TV viewing hours are projected to rise by 25% by 2022 We recommend a target audience should be between 15 and 30 percent of the overall media provider audience. 3. With the largest scale, programmatic TV is perfect for brand awareness campaigns seeking national exposure. Addressable TV Statistics for 2020. The term refers to the broadcasting that has been taking place to our households for many decades now. If you have any questions or comments on this, please ‘address’ them to us. Programmatic TV – Buy linear TV ads programmatically and serve them during live programming. On the chart we have plotted the Efficiency (ROI) and Scale (Sales Driven) of a number of different media campaigns. Since OTT content is delivered over the internet to connected TVs with persistent IP addresses, advertisers can target and serve ads to specific … The concept of addressable TV is simple: deliver TV advertising like one targets email or direct mail, using household-level audience data such as income, lifestyle interests, shopping behavior and family composition. Reality in Addressable TV Linear TV Programma6c TV Percep6on Reality Linear TV Addressable Linear TV Video On Demand (VOD) Over … Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. While there are already more than 30 million homes delivering addressable, the remaining 75 million pay TV homes are not. While this potential audience isn’t all watching the same channel at the same time, advertisers can capitalize on a viewership of millions at a time on a single channel. “We wanted to take the principles of data and automation and apply them to TV to find networks, programming and dayparts above the point of diminishing return that a linear TV plan will have and find ‘spots and dots’ that can extend reach,” says Schmidt of Cadreon’s entry into TV. If they continue watching that channel, the next addressable spot for that company will have another component to that same story. Moreover, many new data tools in TV advertising can apply as equally to the annoying kind of TV advertising as they do to addressable and connected TV advertising. Addressable TV has often outperformed Linear TV in ROI (efficiency). The orange bubbles (Linear) are actually clustered around the horizontal dotted line, representing the average. In an hour of cable TV, there are up to two minutes of addressable ad space available. In 2017 alone, U.S. advertisers spent nearly $72 billion on TV, comprising 36% of all spending that year. Leading Independent Econometrics Consultancy…. The TV space is a challenging ecosystem and growing more complex with each passing day. (Nor do we typically suggest that brands with a weak use case give it a go out of academic curiosity!). Consider current addressable TV advertising on traditional linear TV platforms and premium “non-linear” TV platforms on digital platforms. On the horizontal, the sales driven by each medium, or campaign, in other words scale. Linear advertising that calls for a memorable, emotional response also reaches beyond target demographics by sentimentally engaging the masses. We and third parties such as our customers, partners, and service providers use cookies and similar technologies ("cookies") to provide and secure our Services, to understand and improve their performance, and to serve relevant ads (including job ads) on and off LinkedIn. As early as 2010, 86% of TV viewersskipped over ads while catching up on programming saved by their digital recorders. Where programmatic is made simple. Advanced TV has tools to limit the number of times a viewer sees an advertisement or can even evolve the strategy to display a growing story as they watch from hour to hour. Addressable linear TV does not widely support dynamic ad delivery, though specific ads can be sent to specific (addressable) households for granular audience targeting. From Q1 to Q2 this year, addressable linear TV ad spend increased 150 percent on the Videology platform. We define Programmatic TV as an automated, data-driven method of planning and buying linear TV advertising. And that is exactly the strategic challenge presented by the chart above: how to increase investment in highly efficient, tactical Addressable media whilst maintaining the efficiency. We’ve written elsewhere this month about the subject of Addressable and Programmatic media – what they are, how they work, what the pros and cons are and some rules of thumb for how they perform. As far as the investment in ad space itself, advanced TV has a higher price tag with a purpose. With the range of capabilities TV advertising has to offer, creating the right strategy is paramount. Addressable TV is the ability to deliver targeted TV ads on a household-by-household basis via cable, satellite and … Of course, these observations are not independent of each other. Brands’ forays into Addressable often tend to be niche and tactical, rather than sweeping. Respondents viewed data-enabled TV and addressable TV favorably as well, in terms of expected spend. Advertisers typically view data-driven linear and addressable TV as separate strategies, when actually the two work best in conjunction with each other. If a linear TV ad costs $10 per thousand viewers, a marketing metric known as cost per mille (CPM), then that means it will cost $100 to reach one thousand interested customers. Advanced TV ads, in contrast, can use their targeting parameters to calculate an ROI with a post-campaign study. However, just to add to the pile of opportunity in the TV space, some media providers are able to take linear TV one step further and use data for more precise targeting- a capability once limited to addressable advertising. Addressable advertising takes the opportunities found in linear cable TV a step further through more precise targeting. With addressable advertising, however, companies are targeting specifically their intended audience, so if they spend $40 CPM, then they reach one thousand customers with only that $40. The importance and power of addressable TV Addressable TV The ability for an advertiser to define an … Traditional linear ads do not have the data supporting them to capture how that spending equates to sales. Another advantage that addressable linear TV has is that it can rely on the current analog TV ad-serving infrastructure. For more information, see our Cookie Policy. However, alongside the growth of over-the-top television has been the tendency for people to skip over ads with the press of a button. There are opinions across the market that addressable is five times more expensive than linear but, according to Taylor (pictured), broadcast video on demand could become more cost effective when a linear campaign reaches 60% – which in Direct Line's case equated to a cost saving of 5.4%. By using this site, you agree to this use. Addressable ads offer the first-ever targeted approach to marketing, which can hone in on specific demographics and offer ROI metrics that help plan future TV … As data analytics and overall marketing technology continue to evolve, innovation in advanced TV calls into question how linear ad spending will continue to function. Advertisers can target individual households using first and third-party data. Addressable TV. Here we want to go a bit further and share some of our findings (suitably averaged and anonymised) in relation to Addressable TV. However, when it came to linear TV, respondents had a more negative outlook — only 12% said they would increase their spend, with 21% saying they would decrease it. During this time, advertisers can not only target customers with campaigns catered to their interests but also customize frequency. Streaming is here to stay, and addressable connected TV campaigns are now within reach for brands willing to invest in the right approach—with the right partners. Basic targeting is used, as advertisers can choose a network based on a large demographic they know will watch it, such as a male audience for ESPN, or an older audience on IFC. Conversely, the fact they are small, means that Addressable TV is not likely to be the backbone of your media plan. With help from our team at NYI, your brand can make the most of this prominent advertising medium by building a plan that drives customers to checkout. LinkedIn recommends the new browser from Microsoft. With linear advertising, this type of scale allows brands to reach a vast market with a single campaign. However, if you consider these two technologies as competing channels, it limits the abilities that both can perform for a brand.  Let’s take a look at how linear and addressable advertising differ-  and how the two will coexist in this new media landscape. **Comcast Live/Linear homes are a subset of Comcast VOD homes ***DISH includes Sling TV • Addressable Linear TV does not widely support dynamic ad delivery, though specific ads can be sent to specific (addressable) households for granular audience targeting. Streaming servi… Data-driven linear gives brands reach and targetability in their chosen DMA, making data-driven marketing on linear TV more accessible with a relatively lower cost-of-entry in comparison to addressable … Linear TV is a different term for what we know as traditional television, as a matter of fact. Addressable TV budgets are far smaller than Linear TV. “Anything that can be delivered programmatically, we … In comparison, there is a glut of linear TV ad time in the US, which is why household addressability will unlikely scale to become the predominant tack of campaign audience fulfillment. In the US, TV inventory is nested, with advertisers able to reach audiences at a programmer level, through syndication, spot TV and local …
addressable tv vs linear tv 2021