If you stick around long enough, generally speaking, you’ll experience a tried and true proven way of doing something that can, and will, be enhanced by technology. Such is the case when talking about the art and science of television buying and negotiations.
Until recently, the buying of nearly $70 billion dollars in television was strictly done based on age, gender, and geography. The goal of television campaigns was to reach as many people as possible within the specified target audience and budget parameters. Media planners and buyers would throw around television goals such as; “we need to reach 60% of Adults 18+ a minimum of 3 times in the top 10 U.S. markets.”
Due to new technology, we have the ability to take the age, gender and geography goals to a whole new level with behavioral data driven metrics, such as lifestyle measures, loyalty card data, online data, set top box data and more. This is known as programmatic advertising, the automation of processes and application of data to enhance results and inform future decisions, as defined by Audience Express) The goal of a programmatic television solution is to garner efficiency through improved targeting beyond the rating point, real time optimization of creative units, and the ability to reach an ever increasing fragmented audience.
Just think about how releasing television from the need to use surrogates like age and gender can improve a marketer’s campaigns. A car manufacturer can target in-market car buyers instead of trying to approximate that audience by buying against Men 35-54.
Further, the need for knowledge of a market’s quirks, or for investing in relationships with sellers over time, can be bypassed. Programmatic buying promises a flat marketplace, with advertisers paying what the market will bear, rather than what their agencies or in-house buying teams are able to negotiate.
Cherry-picking audiences is the promise of addressable TV, a subset of programmatic buying that allows targeting on the household level, informed by data which is married to individual subscribers. Think of addressable TV as possessing many of the same qualities as real-time bidding in programmatic digital display.
Addressable TV, however, can also be problematic when it comes to its role in a modern communications plan. With other forms of broadcast buying, advertisers have benefitted tremendously from spill – ads seen by people outside their ideal target. The spillover effect is responsible for countless sales and affinity for brands. Without it, marketers may zero in on their ideal target, but will miss out on the ancillary effect. In this way, addressable TV is more of a precise device, where more traditional TV buying methods are a blunt instrument.
While precision reach seems desirable, most marketers would benefit from a combination of the two approaches when assessing how television functions within the context of a media plan.
According to eMarketer, the adoption of programmatic TV buying is rapidly becoming more important as advertisers and agencies shift dollars to more precise marketing methods. Nearly 57 percent of U.S. marketers plan to shift budgets from national television to experiment with it, as compared to nearly 35 percent that will create new budget line items to test programmatic TV.
If a significant portion of that budget ends up in addressable TV, marketers should test cautiously to avoid seeing diminished returns due to a reduction in the spill effect discussed earlier.