People-based TV ads are almost ready for prime time. Here’s why

It’s about time for TV ads to get… personal.

That’s right, turn down the lights. Flip on your favorite show and enjoy some ads hand-picked just for you. Or, at least, for the person whose email address is linked to the cable subscription.

Addressable TV now reaches  42 percent of American households. And it’s projected to reach 74 percent of homes by 2020. Almost 60 percent of brand marketers are already advertising via addressable, and that spending is projected to reach nearly $2.2 billion in 2018, according to the Video Advertising Bureau.

But for marketers who have seen strides made in digital targeting, even addressable TV feels a little loosey-goosey. More than two-thirds feel they could be targeting audiences even more tightly. Enter people-based TV advertising, a tactic whose time is nigh, if not fully arrived.

First, just what is addressable TV?

Addressable TV gives advertisers the ability to send a particular commercial to a particular household. Marketers use targeting data they can cross check with multichannel video programming distributor (MVPDs, or if you want to be really crystal clear—pay-TV providers like Time Warner, Verizon, and Dish.)

That data—including zip code, household income, age, gender and more—makes it possible to spend more effectively on television. Rather than running the same ad on the same show that gets watched nationwide, advertisers can target only those households in a region that make sense for them. At least, they can do so within the two minutes per hour of TV time that MVPDs make available.

Since addressable TV advertising targets households, it’s a smart venue for marketing products that constitute “household-level buying decisions,” said Dan Ackerman, CRO at Samba TV, a television data and analytics company. “Auto has driven a lot of the investment in household addressable.” So have financial services that target households at certain income levels.

Getting even more personal

Advertisers of more personal products—brands hawking the likes of tampons and Axe body spray—would benefit from a one-on-one conversation.

But the data available via addressable TV is limited by digital standards. Typically, the CRM data that advertisers own is far more specific, including online behavior, past transactions, product preferences and identifying information like email addresses and platform logins.

The promise of people-based marketing through addressable TV is to bridge that gap and ensure that not only can advertisers know they’re targeting the right household, but that they are identifying a specific person. That’s done by cross-referencing some piece of identifying information with the CRM data advertisers hold dear, then targeting their household via addressable.

So if your CRM data showed that a customer recently stocked up on Axe body spray, you could perhaps target his television with ads for the deodorant instead. But you’d still have to hope it was him in front of the TV when you do, and not his patchouli-loving roommate.

“Right now there is not a mechanism to understand exactly who is in front of the television at any given moment,” Ackerman said. Instead, advertisers rely on other “signals,” including “time of day, context, channel, the makeup of the overall behavior of the household.” Then they work backward based on who else they think lives there.

A manual path to people-based addressable

At least one political agency is taking the long way to people-based addressable TV. Deep Root Analytics helps agencies—“about half” of which are political—reach desirable target audiences by making those audiences available on both Dish and DIRECTV. The company gives individuals “propensity scores” for how they’re most likely to vote and determines whether a household all tends to vote the same or is mixed politically, said CEO Brent McGoldrick.

Though Deep Root can discern individual profiles from within a household, it “can’t speak one-on-one” to them at the moment, said McGoldrick. It also has data that shows who in a given household watches which shows, and could figure out whether a certain individual saw a particular ad “based on the return pass data from an addressable ad.”

“I could run a flight, let’s say, over two months to an audience, have that data returned back to me as to when the ad aired, so that would tell me about the viewership,” said McGoldrick. “I can then match that back to the audience composition for those households and then determine who in that household was likely the viewer…based on that, you could derive a person-based [viewing] schedule.”

 What’s standing in the way of full people-based?

Even with all the data currently at their disposal, there’s still no way for advertisers to know for certain just who might be tuned in. Still, when the average US household has fewer than three people. That means is that the industry is pretty darn close to people-based addressable TV right now. But even with household-level targeting, advertisers are still making an educated guess using those old standbys; dayparts and demographics.

According to television analyst and author Alan Wolk, the biggest barrier is tech. “Not enough people have advanced set-top boxes that can deliver the data you need, and for those that do the tech to serve ads dynamically isn’t there for MVPDs.” Growth is expected on both fronts. However, the biggest change will be how we access television at all.

“In ten years,” Wolk projected, “we’ll have individual logins for television.” Wolk expects that this, along with recommended rather than time-based programming, will close the loop on people based addressable TV. But in the meantime, he added, what we can do is good enough. “Even if you’re not perfectly accurate, you can make an educated guess about who’s watching and which ads they’ve seen.

Until then, advertisers are going to have to drill down through traditional linear TV buys, into addressable TV,  and from there, into digital. Samba TV’s DMP–which uses LiveRamp for cross identity resolution–collects multi-platform data on individual consumers so they can follow them beyond the TV and across screens.

That hasn’t stopped advertisers from investing. All those auto brands investing in addressable TV know that while “a car may be a household buying decision,” said Ackerman, there’s a point at which they have to narrow in on a certain member to make the purchase. People based data can tell auto advertisers that the head of the household is in the market for a car, while other data helps them zero in on the person in the house with the most purchasing power.

Ultimately, according to Ackerman, “being able to bridge the gap between TV and digital to continue that communication with the consumer…is really the combination that makes this entire part of the industry grow.”

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