Home Analysis Approaching lift-off for addressable TV on national programmer inventory in the U.S.

Approaching lift-off for addressable TV on national programmer inventory in the U.S.

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‘National addressable’ is coming, and it should be big. That was one of the takeaways from the Future of TV Advertising U.S. conference held in June. Giving an update on his company’s role in bringing this new paradigm to market, David Porter, SVP & General Manager, Addressable Advertising at Canoe (which acts as a simplification layer between programmers and MVPDs and among other things will aggregate and harmonise audience segments), declared that “national programmer addressable is a game-changer because it really opens up opportunities for marketers to reach new customers in new ways and in more precise ways.”

Household addressable TV advertising is established in the U.S. but until now the only inventory available via Pay TV operator set-top boxes was the two minutes of ads per hour that the distributor is entitled to sell (an arrangement that does not exist in European markets or in Canada, for example). But this is only a fraction (albeit a meaningful one) of total advertising inventory across ‘traditional’ networks.

“What we are talking about here, and what Canoe is enabling, is the 14 minutes per hour of programmer inventory, so we are opening up a whole new set of inventory,” Porter emphasises. This enablement covers linear [broadcast TV] but also VOD, which has been available with dynamic advertising insertion via Canoe for around eight years but not with full addressability.

“Because VOD is already DAI-ready, enabling it [for full addressability] only really requires the audience segmentation data. I consider VOD to be addressable TV’s best kept secret,” Porter told the live [online] conference audience.

Both the buy-side and sell-side support the roll out of national addressable TV in the U.S., making execution the key challenge. This is complicated by the fact that each individual MVPD (Pay TV operator) footprint has its own unique characteristics and requirements that programmers would have to conform to if they approached the distributors individually.

One of the key purposes of Canoe is to engage at a technical level with the MVPDs, take care of these architectural complexities, and present programmers with a simplified, aggregated multi-MVPD footprint – in effect a one-stop-shop through which they can execute a national addressable campaign that the programmer has sold to an advertiser.

Canoe is not the only company looking to build such a footprint, as you can read later, but it has built on its existing relationships to provide a footprint covering the cable giants Comcast, Charter and Cox to provide 25.5 million linear addressable enabled homes and 34m homes that can support addressable VOD.

Other MVPDs will be added to this list over time and, importantly, this is not intended as a cable-only initiative nor even a Pay TV-only initiative: Canoe is already talking to Smart TV manufacturers about making them part of the same unified national addressable TV footprint. “Wherever a national programmer wants to make their inventory addressable, we can help – that is part of the vision,” Porter confirmed.

The discussions with the Smart TV providers are going “quite well,” he reported. “This infrastructure is primarily IP-based and in some cases it is a little easier for them to execute addressable TV, but what Canoe can do is aggregate [the footprints] so there is a single place to purchase inventory from [the programmer] and a single system to leverage.” Porter admits it is early days for these Smart TV discussions but believes interoperability and simplification will benefit the Smart TV market as much as the Pay TV world.

Canoe has been running a pilot of programmer national addressable TV since Q4 last year with several media owners, two of which have been named publicly: Discovery and AMC. The results have been positive, with advertisers running repeat campaigns and making use of both linear addressable and VOD addressable in the same campaign. The pilot will scale at the end of this year as more inventory is released, more programmers join and there is more automation (e.g., for triggering and signaling). Porter declared: “Q4 is when we really press the pedal to the metal.”


More than one route to market

Another programmer heavily involved in national addressable TV is ViacomCBS, which has already worked with DISH Media (the sales house for the DISH Pay TV platform and Sling TV virtual MVPD) to deliver addressable impressions within a live national broadcast via DISH set-top boxes – a landmark achievement that was announced in January. Addressable ad replacement was successfully executed on a select number of live campaigns across DISH’s 9 million household footprint in certain CBS markets. Seamless integration between programmer and distributor infrastructure and signaling processes was one of the key technical achievements.

Mike Dean, Senior Vice President of Advanced Advertising at ViacomCBS, declared at the time: “This breakthrough allows ViacomCBS to deliver the most powerful solution for our advertisers by combining the reach of national broadcast with the targeted relevance of household addressable. While cable networks have been addressable for years, addressable national broadcast has remained technically unreachable until now, making this a tremendous milestone for the industry and the future of television.”

When revealing the national addressable implementation with ViacomCBS in January, Tim Myers, DISH Media’s GM of Strategy and Products, declared that, “Implementing national broadcast enablement is a first for the industry, and a critical achievement in continuing to drive scale for addressable TV advertising.” Larger, national advertising budgets are the prize, as he noted.

Speaking at The Future of TV Advertising U.S, Seema Patel, Vice President, Partnership Development at ViacomCBS, described the insertion of targeted ads into CBS broadcast feeds served via MVPD set-top boxes as a big step forward and a historic moment. But MVPDs are not the only people that can support addressability on national programming feeds and Patel made it clear that her company views this Pay TV footprint as one part of the distribution chain for addressable advertising.

The company, which already serves advanced advertising to linear and VOD touchpoints across the streaming space, including in its owned-and-operated apps, is also part of the INVIZIO-led Project OAR (Open Addressable Ready) that is intended to ultimately support a large-scale addressable TV footprint via Smart TVs, partly by creating a direct dynamic ad management pathway between content owners and the TV devices.

The OAR consortium works on open standards and has a long list of programmer members that also includes WarnerMedia, Scripps, Hearst, Fox, Disney, Discovery Networks, Comcast/NBCUniversal and AMC Networks.

Emphasising how her studio/programming group is agnostic when it comes to the technology enablers that support national addressable TV, Patel said: “Our vision is to extend addressability across as many footprints as possible, so we have a unified offering across apps, OTT and broadcast networks. We want a comprehensive set of addressable options to reach viewers regardless of the end-point or where they are watching our content.”

Another of those footprints could grow courtesy of Roku, the company that started life as a connected TV streaming device maker, became an aggregation platform and content curator, and is now a major ad-tech presence. Roku recently acquired Nielsen’s Advanced Video Advertising (AVA) business, which includes Nielsen’s video automatic content recognition (ACR) and dynamic ad insertion (DAI) technologies. AVA is another initiative that was born with the Smart TV world in mind and its acquisition was designed to accelerate Roku’s launch of an end-to-end DAI solution with TV programmers.

Roku wants to be an enabler for large-scale DAI and addressable TV advertising and believes streaming and connected TV is going to play an increasingly important role in that. Julie Anson, Head of Addressable at Roku, was reluctant to say that Roku wants to capitalise on the decline of linear TV so re-stated the opportunity as “shifting consumption trends” and declared: “We don’t talk enough about the fact that there is a new version of TV.

“We need to find consumers where they are consuming TV-like content and that includes streaming.” She said that “addressable TV combined with streaming is a home run.”


Collaboration across all stakeholders

Viacom’s Patel acknowledged the need for collaboration and partnership, saying nobody can do national addressable TV alone. “We are collaborating with our peers to push standards and ultimately automation because that is what will drive scale and growth.” She believes the national addressable market has reached an inflection point, with encouraging progress and momentum, including the work with MVPD partners.

Huda Kazi, VP, Ad Technology and Operations at Discovery, is also encouraged by the degree of collaboration across all stakeholders, including the programmers, MVPDs and data providers. She highlighted the need for interoperability [for planning and campaign management purposes] between linear, addressable and streaming, and the challenge of finding audiences across different footprints, connecting the data and feeding that into a reliable forecast. Discovery itself is going to (eventually) create one large inventory pool from all its assets including the linear channels and discovery+ (its D2C streaming service).

As one of the publicly named programmers working with Canoe and a member of Project OAR, Discovery, too, is looking for multiple routes to market for national addressable inventory. Noting that it is still early days for this concept, Kazi added: “It is very fast moving and there is going to be growth in the next year.”

Kevin Arrix, SVP at DISH Media, made it clear that his company is trying to link arms with other stakeholders to ease the workflow and so help scale the addressable business. “We are starting to see pockets of this [workflow collaboration],” he reported.


Unified omnichannel TV marketing

He provided the ultimate vision that distributors, while acting independently of each other commercially, will be aligned around common workflows and targets (audience segments), working against the same KPIs and using the same measurement. “You want to be able to offer the buyside one point of entry,” he added.

He also discussed what will become one of the biggest challenges once national addressable scales: holistic campaign planning and management, which includes optimising the parallel use of addressable, linear TV and connected TV. Arrix said linear TV still works but the reach curve starts to plateau a little earlier now. DISH Media can look back at the first two weeks of a campaign and see which homes are under-exposed and create targeting segments to redirect the advertising to those consumers.

“We have to understand the proportion of dollars that should go into three different lanes: linear, addressable and CTV, and everyone needs to understand the strengths of those lanes and lean into those strengths,” he added.

Unified omnichannel TV marketing is the order of the day and one company that is working hard to make it happen is Finecast, GroupM’s multiplatform addressable TV planning and execution specialists. Marissa Jimenez, Managing Director at Finecast, gave a progress check.

“We know what addressable is going to do to our overall media plan and we know the point at which addressable should be included and how much of it to include. We know how to create custom audiences and apply them, and know the measurement that people expect. We have made tremendous strides in the overall planning process but until now that has all been done in a silo, and now we need to figure out how to integrate it into a holistic media plan.”

Jakob Nielsen, CEO at Finecast, added that the company can optimise reach and frequency management across all the addressable TV inventory partners the company works with – and the company claims to have the largest pool of linear and connected TV inventory available. Finecast provides a single point of access to this inventory pool, which includes broadcasters– although the company is agnostic to the platforms or media owners used (beyond the obvious caveats of TV quality and brand safety, etc.).

Jimenez emphasised the need for multiplatform, omnichannel thinking. “There is a need to integrate the different channels so that they complement each other, and to unify the addressable part of the marketplace…We are using data to find the audience target regardless of how or where they are consuming video.”

Anson at Roku, who thinks streaming is the future-proofed version of TV, alluded to the need for integrated planning when suggesting that addressable growth relies on good agency-level understanding of how much to invest in addressable versus other tactics. Discovery’s Kazi was explicit that advanced TV is a toolbox that includes national and local, data-driven linear (which the company also provides), streaming and addressable.

“Addressable is an extension of the planner’s portfolio,” she declared. “We consider it a premium product but part of a broader set of tools and something we look at as part of a full sales offering.”

Melanie Hamilton, Head of Enterprise Sales, Effectv at Comcast, echoed this approach, saying addressable (including now, national addressable) is one tactic alongside data-driven linear and regular linear TV. “We want to make sure that advertisers are not simply cherry-picking addressable TV,” she said.

She also believes the addressable value proposition needs to be simplified for the C-Suite, including for CMOs, with an emphasis on proof of performance. “We need this to go mainstream and it will, once the C-Suite is onboard.”

Maureen Bossetti, Chief Partnerships Officer at Initiative, an agency under the IPG Mediabrands umbrella, also made it clear that addressable (and national addressable) will be one of many tactics to deliver ‘growth audiences’ for clients and pointed to the declining power of linear TV as an incentive to move into this and other spaces.


The tipping point for linear reach

She declared that we have reached the tipping point when the audience supply via linear TV cannot match her agency’s reach needs on its own, and Initiative is making a much more significant shift into other channels, including digital video. “We are much more focused on connected TV and OTT,” she declared. “This year, more than ever, we have been pushed to go and find the [audience] supply opportunities across the marketplace.”

She added: “Clients that are really heavily into DR [direct response TV] are not seeing the same results anymore, because we were not really finding incremental reach – we were building a lot of frequency instead. When we started to move into new territory like connected TV and OTT the clients started to see the [positive] results, using different pockets within the video environment.

“We are still spending in [linear] television but obviously we have to spend less and we are seeing what that full video view looks like. We are expanding our purview to other video sources.”

Initiative is taking a more aggressive approach to audience buying in general and Bossetti said overall audience buying is close to 20% of TV budget today, “and that could definitely go to 30-40% in the coming year or two.” This includes optimised linear, and also addressable, which she described as one tactic that can drive incremental reach (and incremental frequency) against a growth audience.

“The way to build incremental reach is to start adding more audience buying, more household addressability and moving into other video channels based on client need,” she concluded.

Initiative is embracing the arrival of addressable TV on programmer inventory, and is involved in tests. “We want to understand what the right scale is,” Bossetti said, noting that addressable TV is moving from test-and-learn to an always-on channel.

She outlined an important challenge as national addressable scales: the need to demonstrate the fidelity of custom data matches and measure the outcomes, so that if you buy 8 million allergy sufferers, you know you got them and that it was more efficient to target this group than to take a national (standard linear) buy.

You can read our Future of TV Advertising U.S. 2021 event report here.

And you can find out about this year’s event, which is in New York in June, here.

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