But the advancement in addressable technology, which can send
ads to specific households that match customer targets beyond the
typical age and sex demos, is allowing marketers to produce
measurable results for TV.
Currently, about 40 million households can receive
household-targeted ads either on linear TV or through
video-on-demand. Dish Network and
DirecTV have been leaders in the space; Cablevision offers some
household addressability; and Comcast is expected to roll
out linear addressable advertising in the next few months.
"There are now enough households that we can match the backend
and close the loop on ROI -- we can tie advertising back to sales,"
said Tracey Scheppach, exec VP -- innovations at Publicis Groupe's
Consumer-packaged-goods companies have been the most proactive
in matching campaigns back to sales. A Nielsen Catalina Solutions
joint venture links what consumers watch and what they buy using
data from Nielsen Homescan and nearly 70 million shoppers from
Kraft's Kool-Aid brand ran an addressable campaign through the
spring and summer targeting households with children between 7 and
12. and an income of more than $70,000. Kraft saw 43%
cost-per-thousand efficiency compared to a general linear campaign,
a 21% increase in sales rate and a 38% lift in household
penetration, according to Ms. Scheppach.
The political arena is another area that could be a big catalyst
over the next few months. During the 2012 presidential campaign,
data was harnessed to determine the networks and programs that have
a high concentration of target voters. The 2014 mid-term elections
will take this a step further, allowing campaigns to actually send
specific messaging to specific households. Dish and DirecTV have
combined their ad-sales effort to apply addressable advertising to
political campaigns, creating a dedicated sales force in
Washington, D.C. This allows campaigns to access inventory from
both satellite operators with one buy.
Demand has been so robust Dish Network has needed to make more
inventory available, said Warren Schlichting, senior VP-media sales
at Dish Network. Thus far, the company has made two significant
additions to inventory, selling commercial time that wasn't
previously addressable-enabled. And Mr. Schlichting expects another
round of inventory could come to market.
The hope is that the attention addressable advertising receives
during mid-term elections will then rub off on the general
While the general appeal of addressable advertising has been
reducing waste in TV to make more efficient buys, "what really
changes is the $74 billion TV-advertising market can soon know how
all $74 billion ad dollars are performing," Mr. Morgan said. "We
know TV generally works, but we don't know how or when."
Now, the amount of data that has become available can tie a
specific spot to a specific sale when set-top box data with the
help of a company like Acxiom is appended with data sets like
Kantar Retail, Dunnhumby or Shop.com.
AT&T's AdWorks partnered with IHS Automotive to enable
marketers to measure the effectiveness of their TV auto advertising
campaigns, and Nielsen Catalina struck a deal with FourthWall Media
to provide consumer-packaged-goods marketers with more granular
For marketers, this will mean getting a handle on purchase
behavior and understanding TV buying beyond the typical Nielsen age
and sex demographics.
Ultimately, there will be a need to aggregate data so it's less
complicated, Ms. Scheppach said, noting that one data company may
have Kroger sales data while
another might have Safeway. "But we want
In the addressable world, will advertisers still want old-school
ratings details? "Most in the market believe that advertisers will
want both metrics on the reach of ads as well as metrics on how
consumers react to those ads. They don't have to be mutually
exclusive," said Simulmedia's Mr. Morgan. But, he added, "as more
information is available about how TV ad spots drive provable
sales, TV GRP numbers will become less important."
There's also the prospect that marketers, agencies and media
companies might not like some of what the data proves.
"Some spots will dramatically outperform gut expectations and
… many spots will prove to be absolutely worthless," said
Mr. Morgan. "The fear of the unknown -- and looking dumb -- is the
biggest thing holding up change and adoption of true
impression-to-impact measurement of TV advertising."