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Advertisers Are Using Addressable TV in Greater Numbers

Advertiser Perceptions study of advertisers familiar with Addressable TV shows majority buy it as much for brand awareness as transactions.

NEW YORK (April 24, 2017) – Addressable TV advertising has doubled in the past year, according to various industry sources, thanks in large part to an influx of advertisers that are placing targeted ads for brand awareness as much as for sales promotion – the value most readily ascribed to the medium.

And now they want more.

A new study by Advertiser Perceptions finds that three out of four advertisers familiar with Addressable TV are currently placing such targeted ads, and 73% of these advertisers are new to the medium in the past year. Overall, 63% of advertisers now consider Addressable TV an important part of their media mix. Fully 54% plan to increase their spending in the next 12 months, citing an average projected increase of 10%. The chief reasons: Addressable ads can now reach more people; delivery technology has improved; consumers want more relevant ads; and more precise sales attribution than traditional TV.

“Advertisers want to apply rich data to all audiences, and Addressable TV now meets the threshold,” said Randy Cohen, President of Advertiser Perceptions. “The fact that such a high percentage of advertisers new to the medium already incorporate it into their media buy speaks to the primacy of its effectiveness today.”

Advertisers are achieving multiple marketing objectives using Addressable TV. They are principally monitoring targeted reach and sales conversion. More than half report that Addressable ads are reaching their intended viewers, while 38% say they have connected with hard-to-reach audiences and 33% see measurable impact on such key performance indicators as website traffic and sales.

“The ability to use advanced targeting to drive the buy is the reason why advertisers are funneling more and more money to digital marketing programs – so we can get more efficiency on the back end,” said Michael Mazza, Director of Marketing at Reynolds Wrap. “Addressable is the television equivalent to that. What we’ve seen is that it’s driving enough difference in effectiveness to offset the higher CPM and deliver an increase in ROI.”

Whereas Addressable ads have been considered primarily a direct response mechanism appropriate for the bottom of the classic sales funnel, 40% of advertisers are using them even more for brand awareness or top-funnel marketing. Some 34% are using them for mid-funnel activity, and 29% as traditional low-funnel or transaction ads. One in four advertisers are using Addressable ads for the full funnel.

“Addressable TV is the piece of the puzzle that’s been missing in the TV attribution analysis,” said Tracey Scheppach, CEO & Co-Founder, Matter More Media. “The attribution ability of Addressable TV is going to help money come back to TV”.

“The conventional compromise between precise targeting and big reach is increasingly less acceptable to advertisers,” said Cohen. “They want to communicate directly with prospective consumers with sight, sound and motion throughout the purchase cycle. In that sense, this study makes a statement for the future about all media.”

Asked what will make Addressable TV a primary buy for them, advertisers who currently use the medium as a secondary instrument cited a need for education. Specifically, they said they need to understand the reach, cost and effectiveness better – signaling an education opportunity for targeted TV providers.

Advertiser Perceptions conducted online interviews with 154 advertisers – 49% client, 51% agency – with an average TV spend of $50 million in March.

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