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Addressable Ads May Become Big, But Not Yet

2016 05 02   Peter Feinstein   Online vs Offline Media    

Addressability has been a popular topic in the trades recently. Two particular articles struck me as worthy of detailed responses.

Google’s Rany Ng wrote a great piece: “Preparing For A Robust Addressable TV Advertising Marketplace” (AdExchanger, April 21). Sadly, though, the scenario is at least five years off – even at the ever-accelerating pace of technology that could make some of this possible. Some. Now let’s add some business reality: Addressable TV (ATV) becomes much more expensive on a CPM basis; let’s say by a factor of 30 percent. Probably more.

Add to that the fact that there is never more than a very low single-digit percentage of the population who can be considered even remotely “in the market” for whatever commercial may air, and the numbers may not work.

The real downside to ATV goes unspoken, until now. The reason TV is so effective is because it persuades the masses, often on a massive scale, to take action they otherwise would not be inclined to take. So, big deal, right? Wrong. ATV’s claim to fame is to use data to eliminate waste, but what ATV really does is shrink delivery to a mere fraction of a market, rendering return on investment (ROI) virtually impossible to achieve. And completely gone, robbed by the use of superior data, is a commercial’s inherent power to persuade viewers who mightnot have been in the market for the advertised product or service, and with it the opportunity to deliver a truly powerful ROI.

Is ATV a good idea? Perhaps. Unintended consequences? Absolutely. Lack of scale and reduced cost-efficiency? Clearly.

Proponents Must Document Benefits

I think Jennifer Pelino makes some really great points in “Addressable Media: Gaining Clarity On Ways To Reduce Wasted Reach” (MediaPost, April 20). She nails the nuts and bolts of addressable media, but, before she ever gets there, we’re met with, for me, wholly irrelevant and even incorrect assertions.

“Brands need to embrace the fact that premium inventory leads to incremental sales and increased performance,” she writes. In what medium? TV? Not even remotely; ATV is a complete non-scale, boutique type of targeting tool, with which you’re guaranteed to pay rather astonishingly high CPM’s in exchange for a few hundred thousand households. Maybe.

Yes, Pelino rolls out some pretty impressive uplift numbers, but she offers no attribution whatsoever. To whom do these impressive in-campaign and post-26-week period percentage increases belong? There’s no tangible association made, so we’re left to scratch our heads and wonder. True, we are given a hit list of seven categories, such as pet and frozen foods (among others), that could experience short- and longer-term benefits, but we have no legitimate reasons to connect the dots.

That’s the quandary when dealing with addressable media: There is much spectacle about what it can do but virtually no tangible proof, where actual cause and effect are given to us as clearly as any real media-plan case study would offer. I’m left wanting, and really just wanting to stick with what continues to work for our clients.