As TV advertising and digital technology continue to converge in 2023, a single buzzword seems to rise above all others: addressability. But what does addressability mean in terms of connected TV (CTV) ad serving? And how will it impact the future of all advanced TV advertising?
Over the last two decades, addressability has become synonymous with giving marketers the ability to target ads more precisely. With greater precision, the assumption was that marketers could tailor ads to specific target audiences. As addressability caught on, it was materialized in two distinct use cases.
First, in the digital world, where advertisers serve ads on a one-to-one basis, messaging and creative have been refined to reach specific target audiences, with the possibility of drilling down and personalizing to the individual consumer. And we understand that digital ads rely on performance metrics like clicks as proxies to determine an ad’s effectiveness.
Second, and simultaneously, in the TV world, which had historically focused on mass reach and frequency, advertisers began to take notice of the potential for technology to allow for more sophisticated, targeted campaigns. To meet the demand, we saw the debut of set-top-box addressable TV, powered by multichannel video programming distributors (MVPDs), service providers that deliver multiple TV channels to their subscribers. This created an opportunity for marketers to address specific households with more tailored TV commercials.
While the meaning of addressability continues to evolve, Cadent has come to recognize a more technical definition of this ubiquitous term. In the context of advanced TV advertising, addressability is all about using the home address as the targeting match key to reach an exact audience.
Household-level targeting—unlike transient match keys such as cookies or IPs—offers reliability. For most consumers, their home addresses are stable and accurate predictors of who is tuning into a program on a given screen or device.
Addressable CTV delivery creates not only improved audience targeting but also new measurement opportunities, including the ability to measure incremental return on ad spend (ROAS) for a CTV campaign. This provides advertisers with deeper insight into how TV ads are performing in relation to ad spend, product sales and more.
Identity in action
Consider Cadent’s patented Household-to-IP Mapping, an identity solution that is cookieless and therefore made for TV. One of its unique differentiators is home address-level targeting for CTV ads. This allows Cadent to target a specific household with a brand's CTV ad while controlling frequency throughout the campaign.
For example, Caulipower selected Cadent and Catalina to build a highly targeted campaign that would reach potential, lapsed and competitive shoppers. As an independent brand focused on providing consumers with quick, nutritious and gluten-free foods, Caulipower wanted to increase brand loyalty with existing customers and drive sales among new shoppers, while improving overall campaign efficiency. To do this, they needed to take a sophisticated approach to audience targeting. Enter: household-level addressable CTV.
By combining Cadent Aperture Viewer Graph with Catalina’s ID graph and measurement methodology, the campaign delivered a $2.80 incremental ROAS. This means that for every $1 that Caulipower spent on this addressable CTV campaign, they sold $2.80 of Caulipower products to new or loyal customers.
Ultimately, home address is the only targeting layer where an advertiser can be sure that exposure to a TV ad has taken place within the household, the number of times the household has been exposed, and if that household takes a positive action like making a purchase.
Consumers will continue to shift their attention from linear to CTV, and advertisers are wisely following suit. However, those who are not leveraging strategic audience targeting with the ability to measure their campaigns holistically across channels will be missing out on consumer dollars.
In a time of lingering economic uncertainty, proof of performance is top of mind for everyone. Addressability, with the opportunity to tie CTV exposures to sales outcomes, is well positioned to take on even greater importance. When every dollar counts, advertisers should take a fresh look at the data-driven possibilities of today’s addressable TV advertising.