Advanced TV Advertising Targeting 101

Originally posted on Broadcasting & Cable.

You probably read the trades and know that you can now use rich first- and third-party data to target audiences on TV just like you can in digital.

This is just one of many improvements available via Advanced TV. It sounds straightforward, but dig into the topic and you’ll quickly find yourself asking questions. For example, what’s the difference between addressable TV and programmatic TV? Does digital-esque targeting work on “traditional” TV, or just addressable? What does “data-optimized TV” mean?

Aside from the early adopters, many marketers can’t define exactly what Advanced TV is.

The first thing to know is that Advanced TV isn’t just one thing. It’s a broad term that encompasses an array of products and services. Let's examine three of those services: programmatic TV, addressable TV, and data-optimized TV. Each has its purpose. One might be better for your brand’s goals than the others. Together, we’ll explore how the services work and identify some questions to ask when considering which service might be right for you.

What is Programmatic TV?

Programmatic TV attempts to deliver the efficiency of inventory organization and selection that ad technology creates in the digital world, and bring it to TV ad buying. Many marketers associate programmatic with automation—think real-time bidding on available inventory—but since ad buying on TV still requires a predominantly manual workflow, programmatic solutions are mostly used for planning. For this reason, programmatic TV has a ways to go before it will be confused with programmatic digital ad buying and selling. Once you’ve chosen a provider, you can upload customer data, create a target audience, and rank the available inventory based on which units are the best fit for your brand’s marketing strategy.

Key questions to ask a prospective programmatic TV provider:

• What’s required to integrate a programmatic solution into my media workflow? Do I need to format the data in a certain way? And how do I get the data into and out of your platform?
• Where does the automation end and the manual work begin? Once I have my plan, how does it get executed?
• What inventory sources are accessed through your platform? Are they local, national cable, broadcast, rotators, or at the program level?
• How can I use my CRM data for targeting?

What is Addressable TV?

Addressable TV enables brands to deliver ads directly to specific households. The format enables delivery of different ads to different households within the same show. It’s ideal for reducing waste, but compared to the 110 million households reached by linear TV, its universe is relatively limited in scale. That’s because it’s comprised of about 40 million households via addressable-enabled set top boxes (STBs), and another 10 million households through video-on-demand and TV everywhere apps. To execute a campaign, marketers first create their desired target audience. That audience is then matched to the households in the addressable universe, and the ads are delivered only to those specific households. But beware—delivering enough GRPs to a smaller, addressable audience segment often results in high, often wasteful frequency for heavy viewers.

Key questions to ask a prospective provider:

• How much of my target market is contained inside the addressable universe?
• Within that group, how can I maximize my target reach while avoiding wasted frequency for the heaviest TV viewing households?
• What can you do to help me scale across different multichannel video programming distributors (MVPDs)?
• How will you help me measure the business impact of exposure to my campaign?

What is Data-Optimized TV Advertising?

Unlike its addressable and programmatic counterparts, data-optimized TV allows marketers to use their first party or third party data sets to create strategic audience targets, breaking their reliance on blunt age and gender targets. Then, they can build media plans that maximize efficient target reach, GRPs, or CPMs and activate those campaigns across all of linear TV - well over 100 million households in all. The real value of data-optimized TV is that it can empower marketers to understand the true value of the media they purchase. By matching what people watch with what they buy, marketers can see which audience segments are most responsive, which networks and dayparts are most effective for reaching them, and which parts of a campaign aren’t working well enough. In turn, marketers can then refine their targets, build more efficient media plans, and continually optimize each subsequent campaign for improved performance.

Key questions to ask a prospective provider:

• Can I use my CRM data for targeting? And what 3rd party data sets do you activate?
• How do you select inventory? Is it index-based or do you use other data to determine the most efficient plan?
• How can I see which audience segments are responding to my advertising?
• What kind of attribution models can be applied to my campaign?

Television advertising is undergoing a renaissance. Advanced TV’s three flavors - data-optimized, programmatic and addressable - give brands, agencies and broadcasters new and more powerful tools to plan, buy, sell, and measure campaigns. Selecting the right tool for the job depends on many factors, and there’s no one solution that’s right for all situations. Before you begin, take time to assess your needs, learn about your options, and most importantly, ask questions. Do all this correctly, and you’ll emerge not only with new skills, but quite likely better campaign results, too.