During a conversation recorded for the Future of TV Advertising Global, hosted in London, between Jason Brown (CRO at DirecTV) and Michael Kubin (Executive Vice President, Media, INVIDI Technologies), Brown registered his belief that the capacity of addressability to drive business outcomes will result in significantly lower ad loads on TV in the near future.
He said: “When you think of CTV, with its lower commercial loads that have lower retention issues, [linear commercial time per hour in the U.S.] should not be 14 minutes, but around eight.” Aside from a clear viewer preference, the proposition of lower ad loads is also justified by addressability’s capacity to produce a “four times or five times increase on rates” which reflects its efficacy in achieving campaign goals, he argued.
Another theme discussed was the obstacles addressability faced while being launched. Brown noted that during the early stages of addressability, the TV ecosystem largely based media planning and buying on Gross Rating Points (GRP), as well as age and gender. He emphasised that the [price] premium associated with addressability, while justified by its capacity to eliminate the waste associated with TV advertising, also created the challenge of persuading advertisers of its power to drive results.
He said: “We knew this product was going to have to get sold in at the client level to be able to change the currency at the time with the agencies”. The approach taken by DirecTV involved building successful case studies that could show the precision of targeting, while working “…in combination and partnership with agencies… to develop client vertical best practices.”
Brown also highlighted the important role frequency capping played in making addressability appealing to advertisers. He remarked that through no fault of its own, the TV advertising industry had previously been unable to limit the frequency with which viewers were exposed to the same ads during a campaign. The result often meant 20% of households saw 80% of adverts, while light TV viewers and others were underserved. Frequency capping allowed DirecTV, alongside other satellite and MVPD operators, to show advertisers how to cut waste in their campaigns by leveraging addressability.
Kubin asked whether scale or capacity pose a problem for addressability. Brown replied, “Scale isn’t an issue. If you look at studies, the perception is that there is a lack of scale, but every MVPD cable operator and satellite operator now has addressable, so you’re at full capacity in the cable universe”. He noted that there is no duplication between his company’s streaming subscribers and DirecTV linear [broadcast TV] subscribers, which gives marketers unique reach while advertising across linear and CTV platforms.
Brown also emphasised the need for the industry to rally behind technology which can increase the capacity to serve ads in live and VOD, praising INVIDI’s work in this direction: “You guys solved for this – the ability to run thousands of ads in set-top-boxes, dynamically inserted at the same time in live”.
Brown also outlined the trajectory he envisioned for addressability and the developments he was most excited about. One theme discussed was the movement towards automated ad trading he had observed among agencies and DSPs, allowing target viewers, he believes, to be served with less friction. Brown predicted that capturing more programmer minutes in the U.S. – approximately 14-16 minutes of commercial time per hour – is the next step for addressability. He said: “We’re not so far away from a place where all inventory is addressable, and an advertiser can choose what’s the right mix of upper funnel and lower funnel. That’s what I’m excited about.”
The Future of TV Advertising Global took place physically in London in December. The entire event will also be streamed to the world on January 18-19 and then all sessions will made available on-demand. You can register to watch this content (free) here.