The Argument for Addressable Advertising
For several years, I’ve worked at a monetization-focused conference that has featured deep debates on probabilistic versus deterministic measurement. Each time I start to hear this kind of chatter, I smile, nod, and quickly leave the room.
But for those of us who follow the streaming advertising industry and ad tech, it’s important to have a working knowledge of these topics even if prolonged debates on their relative merits send us running for the exits. For this column, I spoke with Larry Allen, VP and general manager of data and addressable enablement at Comcast Advertising, about a question that lands firmly on the deterministic side: “What is addressable advertising?” The term “addressable” refers to targeting digital and broadcast inventory and being able to buy audience segments on a household level.
According to a Go Addressable industry survey, 73% of marketers are using addressable, which is a 16% year-over-year increase. What’s more, 47% of advertisers who responded to the survey said that addressable played an important or very important role in the negotiation of their upfront.
How Addressable Works
Now that linear broadcast no longer dominates the ad-supported media and entertainment space, advertisers need data to link an audience’s ad exposures deterministically to an outcome, Allen says. Most of the data that advertisers focus on reflects targeting on premium content, but this approach works for non-premium content as well. “Everything is matched to household address,” Allen explains, “but there are other identifiers that can tie to it. They could be behavioral attributes, purchase attributes, or third-party licensed data from other sources.”
In this year’s upfronts, Allen says, “addressable and streaming were a big part of conversations because advertisers rightfully are trying to follow the audience. Therefore, they now need to negotiate their buys across linear and digital. They’re thinking, ‘How do I reach my audiences cross-platform?’ And one of the big reasons for that is better ROI measurement.”
Advertisers can buy addressable either through guaranteed or biddable buys with FreeWheel or other supply-side platforms. “Anybody who’s selling advertising wants to unify all that inventory into a single bucket so that they can have the most scale and reach against any given target that a buyer wants to go after,” notes Allen. Addressable, he says, effectively answers the question, “Who is my audience?”
Measurement
An addressable-ready ad-supported service, Allen explains, “can make a deterministic match between an advertiser’s desired audience target and their subscribers and activate them within their ad inventory.” This is what makes their ad inventory valuable, he says, even if they don’t have scale yet.
Deterministic data is supposed to be accurate information that can be supplied by viewers directly, or it can incorporate personally
identifiable elements such as names or email addresses. Probabilistic data comprises individual pieces of information, such as a device’s
operating system or IP address. This data is what’s used for targeting when supplied data is missing. In other words, a probabilistic scenario is
based on a panel of representative viewers. If a FAST service reaches 2 million people, the representative panel may not be represented
within the 2 million viewers. If this is the case, according to Allen, “they can’t use a third-party measurement service to validate their inventory
and sell against it. If you’re a FAST channel, you’ve got no understanding of who your audience is unless you have a third-party measurement
service letting you know who’s actually watching your stuff. The state of measurement today for these environments is pretty weak.”
How much of FAST content is sold as addressable? “I don’t have the exact percentage,” Allen says, “but if the underlying platform carrying the FAST content has the tech enabled and provides inventory with the ability to match to the deterministic customers, it’s possible.
“Comcast is making this capability available to FAST partners on our footprint,” he continues. “FreeWheel and other ad servers are providing impression reporting. I wouldn’t consider that measurement.” He goes on to list VideoAmp, Comscore, and Nielsen as services that can measure addressable inventory today.
Reach
“Brands that we talk to are very concerned about driving incremental reach—i.e., finding the last 15 or 20% of their audience that are really hard to reach,” says Allen. The premise is that addressable finds this audience and is more productive than buying, say, the 18-to-49 demographic in a specific designated marketing area (DMA).
“That’s one area where we think addressable works really well and is a benefit,” Allen explains, “because if you’re putting an ad in front of people who actually are interested in something, that’s good.”
Frequency
Frequency remains a pressing problem, according to Allen. “It’s a pain point for a couple of reasons. First, it’s bad for a consumer experience when you see the same ad over and over again.” This could mean seeing the same ad in one service or multiple services within a short time frame. “The reason why that’s happening in many cases,” he explains, “is because of the fragmentation of these services, and they don’t necessarily always have the same IDs.”
What’s more, he reports, “only half of campaigns are even frequency-capped at this point, according to a FreeWheel study we did, which is not great. Being able to use an addressable signal allows you to de-duplicate and frequency-cap.”
The Addressable Formula
The 2022 Comcast Advertising Report says buyers still face challenges in obtaining incremental reach, mentioning cost and frequency control as the biggest obstacles. The study of billions of impressions concluded that advertisers should be taking two measures to maximize reach and frequency:
- Allocate 20%–30% of premium video budget toward streaming and the rest to traditional TV.
- Allocate 30% of impressions to highly targeted, addressable strategies, and allocate the remaining impressions to broader, data-driven TV and streaming across networks and dayparts and over months.
The key argument in favor of addressable is that the ability to connect customer information to both viewing behaviors and consumption behaviors makes advertisers more aware of how they think about planning and buying. “Once you know who’s watching or who potentially could be watching something and that they’re likely to transact,” says Allen, “wouldn’t you want to buy just those people?”
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