Report highlights the important role that addressable TV advertising plays in the overall media mix, along with five best practices for planning and buying in this sector

Go Addressable and the Coalition for Innovative Media Measurement today unveiled the results of a new joint industry study on addressable television advertising usage and trends

One of the report’s key findings was this: Leveraging a portion of ad dollars for addressable TV advertising, in addition to linear TV, in the majority of cases, results in increased campaign reach.

The study, titled “A Guide to Best Practices in Planning and Buying Addressable Television Advertising,” highlights the vital role that addressable TV advertising, the ability to serve targeted ads to specific households or users, plays in delivering cost effective reach and frequency. For media owners, the medium can play a vital role in supporting TV’s share of marketing spend in today’s complex ad marketplace.

Go Addressable and CIMM tapped into their breadth of industry members and specially commissioned research and analysis to deliver this study. Go Addressable is a non-profit trade organization dedicated to raising awareness of and advancing the growth of addressable TV advertising using aggregated data with a commitment to protecting personal information. CIMM is a non-partisan coalition focused on cultivating improvements, best practices and innovations in measurement, metrics and data usage across the media and advertising ecosystem.

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Incorporating addressable TV advertising into a brand’s media mix consistently garners about 40% reach, regardless of a marketer’s target audience penetration. For instance, low-penetration brands, which the report defines as under 20%, achieved target audience reach of between 37% and 45%, on average. High-penetration brands (those over 70%) saw a similar result, with an incremental target audience reach of between 37% and 44%, on average.

“The TV ad market is clearly changing, with viewing becoming far more widely distributed over a growing range of linear and non-linear services,” said Jon Watts, Managing Director, CIMM. “Addressable TV advertising has become an increasingly critical capability for the industry, helping advertisers to cost effectively build out the reach and frequency of their campaigns, including for larger target audience segments. Linear and addressable are better together.”

Janus Strategy & Insights and Sequent Partners, the two consulting firms commissioned to develop the study, interviewed 20 agency and publisher stakeholders for original commentary and insights. The two firms also conducted an in-depth analysis of 145 addressable TV ad campaigns, which measured the reach and frequency of both linear TV and addressable advertising.

The research revealed the below key findings:

• Addressable consistently delivers about 40% reach regardless of target audience penetration. Low penetration brands (defined as those with penetrations under 20%, achieved target audience reach between 37 and 45%, on average. High penetration brands (defined as those with penetrations over 70%), meanwhile, saw similar results, with target audience reach between 37 and 44%, on average. The key takeaway here is that addressable TV advertising can help build reach regardless of a brand’s target audience penetration.
• Addressable delivers incremental reach to both large and small linear campaigns: Addressable TV adds incremental reach when linear reach begins to plateau, making it more cost efficient. In fact, addressable TV is found to be between 20% and 30% more efficient in adding incremental reach than linear.
• eCPMs for addressable campaigns are more efficient: Even with higher target audience penetrations, addressable eCPMs (the effective cost per thousands of impressions) are more efficient than linear eCPMs when it comes to light linear TV viewing audiences.
• MVPD addressable TV is more precise than IP address matching and outperforms it: An analysis found that 95% of addressable households were matched via postal address compared to 60% via IP address. After 30 days, 82% of addressable homes remained accurately matched compared to 44% of connected television (CTV) homes.
• MVPD addressable TV is not just for older adults: While many buyers believe that CTV addressable is best used to target younger audiences and multichannel video programming distributor (MVPD) addressable is best used to target older audiences, the data show that CTV addressable and MVPD addressable play complementary roles in reaching adults 18-49.

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The report also outlines five best practices for buying and planning addressable television advertising: 1) develop a detailed audience target profile; 2) benchmark the linear TV effect; 3) determine the reach, scale and eCPM for various addressable pools; 4) determine the point where the linear TV reach curve flattens out; and 5) leverage all data and simulate the reach of the combined linear and addressable TV schedules.

“This is a pivotal time to be in addressable TV advertising,” said Larry Allen, Board Chair, Go Addressable. “In today’s fragmented media landscape, the medium offers advertisers several key advantages for staying ahead of and anticipating shifting viewership habits, including targeted reach, ad relevancy and authenticated identity combined with the highest quality video ad inventory. We hope that these best practices and insight will help the industry continue to move the needle forth on innovation as well as elevate, protect and prioritize the viewer experience.”