What CMOs need to know about addressable TV right now

We explore the onset of addressable TV, Australia's first total TV measurement and reporting system, and the hurdles and opportunities advanced TV advertising presents to advertisers

In just weeks, Australian advertisers will get what many in the industry see as a game-changing capability for gauging what modern television consumption, reach and frequency truly looks like.

Virtual Australia, or what’s colloquially been coined ‘VOZ’, will make its official debut with the Australian advertising industry in late February. The database combines linear TV panel and ratings data with a ‘census’ of broadcaster video on-demand (BVOD) inventory and minutes – some 14 million devices per month – to build a picture of what Australian TV viewership looks like. Using tools such as demographic modelling and by assigning video player metrics (VPM) data to individuals, VOZ presents a synthetic population of 25 million Australians from which advertisers can glean characteristics key to TV.

Importantly, this presents Aussie advertisers with a means of seeing the total TV picture, across screens. It’s designed to aid and optimise the campaign planning process as well as usher in a standardised mechanism by which reach, frequency and impact can be measured transparently. What’s more, such audience data capability opens an opportunity to employ TV not just for top-of-the-funnel brand building, but consideration and even sales conversion.

For several industry pundits, that makes VOZ the missing piece of the puzzle allowing addressable TV to truly flourish in Australia.

And that, many believe, gives TV a new lease on life against digital juggernauts such as Facebook and Google, which have increasingly been snapping up advertising dollars down the funnel thanks to their addressable audience data scope and scale.

Who’s jumped on addressable TV first

To give an indication of industry appetite for addressable TV locally, ThinkTV CEO, Kim Portrate, noted 43 per cent growth in total TV market size over the last six months, and 750 new advertisers in the last 18 months accessing TV in this fashion.

Helping the cause are Australia’s major broadcasters – Seven, Nine, Ten, SBS, ABC and Foxtel – who have thrown their weight behind addressable TV capability, investing time, effort, energy and money to build audience databases that can be used by advertisers for advanced TV advertising.

A further step forward was reached in December, when major broadcasters agreed to adopt Nine’s 9Galaxy cross-screen buying platform to underpin a common demand-side platform (DSP) for the industry to purchase linear TV, live streaming and BVOD inventory. This platform will also take advantage of VOZ to allow media buyers to purchase audience segments across TV formats.

“Different broadcasters offer different areas of inventory and there’s no shortage of it,” Portrate said. “Big sponsorship properties are typically not available as addressable as they’re sold holistically. But other inventory around non-tent pole events is readily available from all broadcasters right now.”

Looking at it from the advertisers’ side, Portrate told CMO brands doing addressable TV well are sophisticated audience profilers overlaying first-party data over the broadcaster’s. At the other end of the maturity spectrum, businesses such as SMEs are using postcodes to add another element of targeting to their TV buy.

Location is in fact the most popular data set so far for Finecast, GroupM’s addressable TV technology division launched in Australia a little over 12 months ago. Finecast A/NZ managing director, Brett Poole, described addressable TV as a relatively new phenomenon, which on the scale of now to granular targeting perfect ion is 5-10 years away.

“Today, what most CMOs want is something a little more granular than TV,”  he told CMO. “Where we’re at right now is dealing with first-use cases. These campaigns are not usually to replace TV, but to be a companion piece to a linear TV campaign.”

Early adopters for Finecast include automotive and retail. “In the auto category, generally you have a national CMO taking care of national brand activation, then dealerships who care about driving people into either the website or a test drive. What’s interesting is you can now use TV more effectively so it’s relevant to dealers via location,” Poole explained.

“We’ve done nframe work taking national ads and replacing the last three seconds with ‘go see your dealer in Parramatta’ and the dealer’s details. And we only show those in the drive-time of that Parramatta store. In other words, you’re blending your national TV campaign with a pointer message.”

In the retail category, a comparable example would be assisting with a sales problem in a specific location in Victoria. “You could pinpoint those issue areas, and up the frequency of advertising in those locations,” Poole said.

Another case could be a super luxury brand looking to target specific areas of affluence. “All of a sudden, TV is an option because you can specify the eastern suburbs or north shore of Sydney,” Poole said. “And the opposite is true: If your brand is not particularly relevant to high-income earners but is to families, you can geo-locate efforts that way. TV becomes an option, whereas previously effectiveness wasn’t so clear cut because of TV’s massive scale.”

Such a shift may not look like a massive change from a product development perspective, but for Poole, it’s hugely significant.

“I like the fact CMOs are asking about what to do with their TV spend, and that they’re excited TV is changing. It’s shaking up old habits that have been there for a long while,” he said.

Underpinning addressable TV’s viability

For marketers to get to this point, Portrate outlined three considerations. The first is data capability.

“If you don’t have enough owned data – such as an FMCG with disintermediated distribution – it’s tough to do. You’re not able to create audiences without owned data,” she said. “So where it’s challenging is mid- to large organisations without that data. In contrast, McDonalds, which has done a lot of data work, is doing a fantastic job.

“Then you have SMEs like the local golf club. Because they have a very clear view of who their audience is, even without the data, and know where those audiences are and might live, they’re in good shape and there’s a lot happening in that space.”   

Addressable TV’s evolution also requires brands to understand they are not only having a conversation with a particular segment, but how often it’s happening. That’s the reach and viewability question.

“In addressable TV, it’s very important to understand what type of audiences you want to talk to and how that overlaps with your brand strategy,” Portrate said. “For example, do you want lots of people, or do you want to target the same people versus different ones? That’s a frequency question.”

Thirdly, it’s embracing the idea of trading in “screens”. “What addressable does is open up more content for marketers to go further down the funnel,” Portrate said. “It’s neither performance nor brand; it can be both depending on your goal.”

All factors rely on technology innovation to support buying and delivering TV in a new way, as well as report on it. This is why OzTam’s VOZ database is so vital to addressable TV take-up.

OzTam CEO, Doug Peiffer, cites a lot of confusion about VOZ. His first point is it’s not a platform, but a database, providing a united currency and standard on TV viewership in a connected world.

Then there’s the technical challenge of being able to unite traditional TV panel ratings data with individualised connected device information - no mean feat. This is further complicated by the fact many second TV screens are still not being connected, tablet devices are used by children one minute and adults the next, we take our personal screens with us on regular trips thus altering our geolocation, and we often watch shows together.

While there’s been plenty of debate at OzTam around how to solve these issues successfully, what Peiffer is in no doubt about is an increasing percentage of us are moving between linear and second stream viewing. 

“Catch-up services are what have made every device a TV. You can access anytime you want, when you want and have an a la carte view of content. That trend is continuing,” he said.

OzTam estimates BVOD services in combination with linear TV can supply brands with 10-15 per cent incremental reach, and tap into younger demographics simply unreachable through traditional TV services.

“VOZ is about the total TV picture – and we can see you’ll miss a lot of reach on a weekly basis without addressable TV in that mix,” Peiffer said. Yet he’s quick to emphasise both forms of TV remain important for the foreseeable future.

“Reach still drives sales on a weekly basis for FMCGs in particular. You need to remind people and that’s where linear TV still reaches the vast majority and where the majority of minutes are,” Peiffer said. “We are in the early stages of transition.”

Alongside demonstrating combined reach, VOZ will at some point offer advanced targeting, helping brands identify when to show a viewer pieces of content if that consumer is in the market for a car, for instance. OzTam has partnered with several data partners including Nielsen, and conducted trials in order to offer such functionality long-term.

“Then we can say if it’s a young person intending to buy a car, you might want to go 60/40 BVOD /linear TV, then upgrade the TV side for older audiences as they’re still watching more linear TV,” Peiffer said.

Poole sees VOZ busting a few cross-sell screen myths. “People have been trying to figure out what the crossover between broadcasters really is in terms of reach and audience – it’s been a percentage people have been guessing up until now. We are going to see that for the first time this year,” he said. 

VOZ also brings a gold standard reporting mechanism helping cement addressable TV’s viability within the marketing mix.

“We’ve gone some way to prove the brand metrics around uplift through addressable TV, and have partnered and bundled the costs of the measurement items in campaigns where we could to ensure some third-party measurement on addressable TV,” Poole said. “But if a brand gets in trouble, the first thing cut is the stuff with no gold reporting standard. OzTam brings cross-screen measurement to the party. And when we see measurement catch up in this space, I only see it growing.”

Portrate goes much further, saying VOZ liberates the advertiser without any data currently.

“If I’m a business without data sophistication, I don’t have a choice but to go to Facebook or Google. But I can’t take what I learn from those platforms and re-ingest it into my own system,” she said. “VOZ is not platform dependent. It enables you to reach audiences in different places and liberates your insights because it’s publicly available data.

“I’m not sure people have looked at it [VOZ] through that lens but it’s a big deal. It enables every business to get a better view of their customer in a way that’s not locked.”

The attribution and reporting aspect isn’t just restricted to OzTam, however. One player hoping to help close the loop is TVSquared, a software platform provider. Its flagship platform, Advantage, looks across both linear TV and advanced TV, aiming for a holistic view of the performance of TV to close the loop on attribution and assist with frequency capping and efficiencies.

TVSquared global director of business development, Brett Gillett, said a “wonderful” opportunity is opening up to utilise addressable TV in a similar way to the digital ecosystem.

“TV has become impression-based advertising and you can see content delivery to the device,” he said. “So you can be 100 per cent sure it’s being delivered. What the addressable market gives you in dataset is advertising delivery around the content on any screen. But the missing piece has been how you track responses to content and measure it. Typically, in digital display advertising, you can measure clickthroughs; in OTT and addressable, it’s just content being served onscreen.

“By utilising back-end data from addressable, then mapping it together with response and first-party data from individual brand websites, we are closing the loop in terms of how we measure impact.

“The power for networks and brands is in understanding at a granular level what TV is driving from mass market to further down the funnel, then relating that back to a business case, which digital has always been able to do.”

Up next: Figuring out what addressable TV is – and isn’t, plus battling short and long-term thinking are our digital bias

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Figuring out what addressable TV is – and isn’t

But while addressable TV opens up an ability to target audiences, is data-driven and connected, it’s a big mistake to lump it as a new digital channel. In fact, getting people to abandon hard-won digital learnings has been a real issue for the team at Finecast.

“People working in digital have tended to jump to the fact that given TV is a ‘digital’ offering now, they should put retargeting in or show you the ad on addressable TV if you’ve visited the website. That doesn’t really work on a big screen you’re sharing with other people,” Poole pointed out.

Another big realisation is ‘digital’ data isn’t necessarily useful in an addressable TV environment. As Poole explained, digital data tends to be personal information, such as browsing history or something tied to the individual. But in a shared viewing environment, you want household data and trends.

“As the saying goes, when you have a digital hammer, everything looks like a digital nail,” he said. “Addressable TV isn’t it.

“We do a lot of brainstorming where digital use cases come up and die very quickly.”

Poole instead compares addressable TV to outdoor media planning and buying, and even traditional TV location-based buying. Key data sets include location, sales and transactional information and trends, and broader audience types.

What’s more, no one expects addressable TV to become a one-to-one platform.

“The benefit of content broadcasters make available – whether it’s drama, sport or news – is it gives high-velocity reach and getting to lots of people, quickly,” Portrate commented. “I can’t see broadcasters coming down to a one-to-one level, as it undermines the value proposition of the channel. But what it can do is give you a segment of 50,000 people, as opposed to 1 million, if those are the people you want to talk to.”  

Because addressable TV can be measured across any device, it also doesn’t detract from concurrent campaigns, either brand or performance, Portrate said.

“It’s a complicated funnel these days, so this is an opportunity, depending on your objectives, to either complement big brand work happening on broadcast or as an SME, to use video to communicate and talk to a large group of people not accessible to you in the past,” she added.

Short-term versus long-term thinking

It’s for these reasons industry pundits don’t see addressable TV triggering the same short-term thinking applying to digital and performance media.

“There is that capability, but there’s also an acknowledgement TV content is different; the attention and innate nature of the content drives stronger attention,” Portrate argued. “I do think it will enable advertisers to use broadcast in the middle of the funnel, but I don’t see it as a performance-based activity.”

Poole is equally cautious around those wanting to use addressable TV like a scalpel. “In our opinion, TV is for branding. Addressable takes you further down the funnel towards the middle. But it’s also got to be at scale,” he said.  

“We’ve done 25 or 30 brand life studies for exposed versus non-exposed… it may not be a surprise but this works similarly to traditional linear TV in terms of brand uplift.”

TVSquared Australia-based business development director, Praful Desai, said addressable TV helps reduce the wastage factor experienced with linear TV. But again, he doesn’t see this resulting in brands taking a short-term approach.

“The direct-to-consumer brands are more ROI or cost-per-response driven, but with the big brands it’s about an opportunity to talk more specifically with specific advertising and strategic creative,” he said. “You can still have traditional measurements for top of mind, brand tracking and so on. But you can reach your core target audience more effectively than you did with linear TV.”

Addressable TV: The challenges still to climb

Even if VOZ proves out everything it promises, addressable TV isn’t assured mainstream footing. One challenge is uptake from advertisers, although Gillett expects the larger brands will follow early adopters once there’s some evidence within the marketplace that “it doesn’t matter if it’s linear or addressable TV, it’s just advertising on a screen that delivers business performance and effectiveness”.

Transparency is another necessity, and that comes back to data. Gillett admitted GDPR has inhibited advancement in Europe, but suggested plenty of ways to address this data sharing issue if people are willing to be responsible.

“You have to have different data sources available to different people to be able to measure clearly and transparently,” Gillett said. “Consolidation of data and wanting to work as part of an ecosystem between network, brand and agency is imperative to getting measurement right. And if you get that right, it opens all sorts of opportunities to optimise TV across all screens to get a better business return. Then everyone wins.”

Then there’s shaking up the TV planning process itself, which hasn’t changed in decades. Confusion about where addressable TV sits in the funnel, and the marketing budget, are sizeable obstacles. The divide marketing functions have created between brand and performance teams, or online and offline, is another major hurdle Poole identified.

“TV buyers and planners are the ones we need to talk to, but much of the time it turns into a technology conversation about how this works, and digital of a sudden comes in,” he said. “So who do we talk to: The ones creating audiences and brand, or the technology and performance guys with the know-how to buy?

“In fact, you need to talk to both at the same time. We’ve had weird moments with two people who generally don’t work together too much, in the same room complementing each other from audience creation to action.”

Poole advises brands to adopt a multi-screen strategy better positioning where linear and advanced TV services sit in the hearts and minds of the consumer. He calls it a public, shared and personal screen approach.

“You have to start planning around screens, not digital versus offline,” he said. “For example, advertisers might have tried to get TV reach in other places and overindexed in such areas and want the quality of TV back. They’ll have an idea of personal screen and loads of tactics and strategy around that; then shared screens; which is linear and addressable TV; then public screens, including outdoor and billboards.

“And be sensitive to the environment in which the ad plays – you’re often planning into a living room.”

Peiffer labelled this the “co-viewing factor” – something VOZ is looking to report on. He estimated a co-viewing factor of 1.5 times.

“We now know drama commonly has more than one person sitting in front of it,” he said by way of example. “The more specific you get with a title – like CNBC news – the more likely you’re on your own. With entertainment programs, there are commonly two or more people watching. But what we also see from VOZ is how many watch on TV one week, then on another device the next, then as the show heads towards a finale, are back in front of the TV set in a group viewing situation.

“It broadens you back out and it’s not as targeted as you think, because these viewers could be one man and three females. It takes you back to the traditional concept of TV. People say TV has some wastage when they’re trying to reach the female audience – well, addressable TV could have some wastage as well.”

Clawing back advertising from digital goliaths

As for whether addressable TV will ultimately tip the scales back from digital targeting goliaths such as Google and Facebook, it’s too soon to tell. Portrate would love to think so.

“They are certainly very valuable channels and I won’t dispute there is place for everybody,” she said. “What I’d like to see is a recalibration back to premium content, because we can measure it. You’ll be able to see results the next day, which is really important given marketers are under the pump in the boardroom to deliver outcomes from their activities.

 “The key thing is the broadcasting industry will enable that flexibility which it hasn’t been able to do in the past. It’s a widget that’s going to help advertisers understand and give them more options.”

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