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State of the Screens

Don’t Believe Everything You’ve Heard About Addressable TV Advertising

By November 2, 2018No Comments

Roughly half of the 120M TV households in the U.S. have the technology to receive addressable ads.

Television homes in U.S. according to IAB (% of total):
Addressable — 64.3M (54%)
2) Non-Addressable — 55.6M (46%)
3) Total — 119.9M

National TV ad spend share by targeting type according to eMarketer:
1) Age/Gender — 95%
Advanced TV/Audience — ≈ 3%
Addressable — 2%

Big question: If ≈ 50% of U.S. TV households can receive addressable advertising, then why does it make up only 2% of TV ad revenue?

The short answer is that it is due to the complexity of the TV ecosystem itself, which pay-TV providers understand. The challenge is what to do about it.

Quote from Marcien Jenckes– President, Advertising @ Comcast Cable:
“The biggest challenge to television as a platform is the various players within television…If we don’t kind of set aside our differences and our territorial rivalries, somebody else is going to come along and eat our lunch. Period. Full stop. No question about it.”

Flashback #1: AT&T Boss Writes Script for HBO: More Data, More Money

If AT&T offers addressable advertising AND owns the networks the following could occur:
1) Ad pricing — A single ad impression increases 192% from 1.2¢ to 3.5¢ due to improved targeting.

2) Inventory — The number of 30s spots available to AT&T increases 600% from 4 to 28 now that they are both the cable provider and content owner.

3) Total impact — AT&T currently makes roughly $0.05 per hour (4 spots x 1.2¢), but that could increase to $0.98 per hour (28 spots x 3.5¢) if they accomplish #1 and #2.

More #1: ‘That sent a big message’: Comcast and AT&T talk about their ad ambitions very differently, and industry insiders think it’s a sign of things to come

More #2: Where Are We in Addressable TV? MediaVillage Polls Agencies and Marketers

More #3: Addressable TV Advertising in The Spotlight at TVB

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.