The strong consultant interest in addressable advertising demonstrates the power of delivering a specific message to an individual voter’s household television. It’s the promise of digital targeting with TV’s audience.
But beneath consultants’ excitement about the technology is confusion about how it works at the local level and when it’ll be more widely available. Now, this is understandable as adoption is inconsistent across multichannel video programming distributors (MVPD).
There are currently three MVPDs capable of addressable advertising on television. Cablevision has 2.7 million homes in the New York City designated market area (DMA). Comcast offers addressable TV currently in Pittsburgh, Pa., and has plans to expand to additional markets during the first half of 2016. Moreover, Comcast also offers addressable with Xfinity.com (digital targeting) and video on demand (VOD) across its entire coverage area. D2, a partnership between Dish and DirecTV, has coverage reaching about 20 million homes nationally. But that comes with the lowest level of targeting offered on the statewide level.
In addition to television, addressability capabilities are available with Time Warner’s TV Everywhere product that inserts ads on VOD, online and through the TV app. A number of MVPDs offer digital addressability, including Verizon, Suddenlink, CenturyLink and Midcontinent.
Still, I’ve heard some consultants ask, how do addressable MVPDs deliver ads and place schedules?
There are currently three possible ways to deliver ads. The most basic form of addressable is segmenting a cable system or zone. A traditional linear schedule is run on a local cable system, but instead of running the same ad to every subscriber, different creative is targeted to different segment groups.
The segments are based on a third-party privacy compliant list matched with the subscriber file of the MVPD, or preset targets created by the MVPD from their subscriber file. Individual commercials or messages are delivered to each segment group on the household level with no crossover between audiences. To wit, Segment A would get a different message than Segments B, C or D.
The second way is to purchase only an audience identified by a third-party privacy compliant list match or preset segments of the MVPD. A campaign would target a specific audience within a cable system’s boundaries and only that specified audience would be exposed to the ad.
The final way is to target by virtual geography like, say, congressional district, and include only people in that area. All three methods are on the household level, not on the individual level.
Moreover, a schedule can be created using two different ways depending on the mode of addressability. Either a schedule is created across networks or dayparts based on ratings. Or a schedule is put together by the MVPD based on networks that best target the specific audience being reached. The latter is done using set-top box information to determine what a target audience is watching.
Not all MVPDs that offer addressable advertising operate the same way for scheduling or delivery.
It’s going to take time for addressable to reach it’s full potential. MVPDs have invested millions of dollars to update operations, software and infrastructure. MVPDs, such as Charter and Cox, are aggressively moving forward with plans to provide addressable advertising on all three platforms they offer (TV, Digital and VOD). They’re all in various stages of development with no firm deadline on availability.
Still, the industry realizes the need to have addressable television deployed across everyone’s full coverage. Unfortunately, the process to deploy is a difficult one and more time is needed to bring the product to market.
Tim Kay serves as the director of political strategy for NCC Media, a company jointly owned by Comcast, Cox Communications and Time Warner Cable.