Addressable TV Ad Spending Expected to Grow to $3.3 Billion by 2020

Addressable TV Ad Spending Expected to Grow to $3.3 Billion by 2020

New Video Advertising Bureau Guide Finds Majority of Addressable TV Advertisers Plan to Increase Investment

Six out of ten advertisers (62 percent) using addressable TV believe it is a valuable part of their media buy and are planning to increase their investment according to Address For Success, a new, comprehensive guide for marketers released by the Video Advertising Bureau (VAB). Forty percent of US addressable TV agency and marketing professionals say they are now making a significant investment in the platform. Seventy-one percent of these marketers have been buying addressable TV for less than one year, signifying a substantial growth opportunity for sellers. The new guide also projects Addressable TV ad spending to increase to more than $3.3 billion by the end of 2020, a 343 percent increase from 2016 to 2020.

In addition to analyzing addressable TV ad spending growth, the guide also examines the increase of addressable TV households in the US, how addressable TV precision targeting works, as well as other advantages for marketers who are considering including addressable TV into their media buying plans. New case studies from a variety of multichannel video programming distributors (MVPDs) evaluating the benefits of combining linear TV media buys with addressable TV to drive awareness, interest and action through product purchase path funnels are also including in the VAB guide.

For the purposes of the Address For Success guide the term “addressable TV” refers specifically to the platforms and technologies available through MVPDs only and defines addressable TV as the use of technologies to enable advertisers to selectively deliver ads to individual households via cable, satellite, and Internet Protocol television (IPTV) delivery systems and set-top boxes (STBs).

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Addressable TV Audience Growth

Addressable TV’s US footprint has grown rapidly, increasing 30 percent from 2016 through 2018, eclipsing other streaming and OTT viewing options, such as Netflix, Amazon Prime Video, HBO, Roku, Sling TV and YouTube TV, among others. The report estimates that the US addressable TV audience 2 years of age and older has grown 27 percent to 162.2 million over the past two years, a larger audience than Twitter, Instagram, Snapchat, MSN, LinkedIn, Spotify and many other digital platforms’ monthly unique visitors.

Advertisers’ Investment

There has been a recent influx of new advertisers integrating addressable TV into their media plans. An estimated $2.1 billion was spent on addressable TV advertising in 2018, on par with projected expenditures in ad-supported OTT during the same period. The majority of US addressable TV agency and marketing professionals (55 percent) are planning to increase future spending. Fifteen percent of advertisers are including addressable TV in their buys on a regular basis, while 35 percent have experimented with it.

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Linear + Addressable TV = Positive Business Outcomes

Address For Success includes more than 10 case studies from a variety of MVPDs featuring multiple advertiser categories, including travel and tourism, automotive, TV entertainment, financial, retail furnishings, appliances, beauty retailer and credit cards. Combining linear TV buys with the boost addressable TV offers delivered positive full-funnel outcomes for advertisers across the categories studied. The scale and attention plus emotional engagement linear TV delivers combined with addressable TV’s enhanced ad relevancy, precision targeting, advanced data capabilities, as well as its superior visibility trust and transparency within the digital advertising ecosystem, led to improved results and return-on-investment across the board.

“The real-world cast studies in this guide illustrate how addressable can deliver not only bottom of the funnel results, but also higher-order metrics, such as brand awareness, ad recall and purchase intent,” said Sean Cunningham, president and CEO of the Video Advertising Bureau. “Through full-funnel activation, marketers can segment and target the right consumer, checking each stage of the purchase process.”

“Addressable advertising continues to gain tremendous traction in the marketplace, and is changing the way brands reach consumers on television,” said Jason Brown, SVP, ad sales partnerships for Xandr. “We also see advertisers using addressable technology to better reach ‘light TV viewer’ households in a more effective way, which is improving the efficiency of their TV buys. We are excited to collaborate with the VAB on ‘Address for Success, and to continue to share with the industry the advancements advertisers are making in the addressable TV space.”

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