What Is Addressable TV?

Addressable TV: what is it and how are CTV and OTT different?

Gone are the days of the single television household, tethered to a rigid broadcast program schedule. And it’s not just that television sets are wider and flatter, or even that they no longer need to rely on cable or satellite – let alone an antenna – to play your favorite shows. Television is now just another extension of the complex digital world we have created, where audiences can stream video content on demand, both from home and on-the-go.

This quiet revolution has completely changed how advertisers target viewers, giving them the possibility to aim their ads with great precision to optimize relevance. OTT (Over-The-Top), CTV (Connected TV), addressable TV… there are now several ways to get TV ads to a household. What is addressable TV advertising? How to choose between addressable TV vs. OTT or CTV? Here’s what you need to know about addressable TV.

Addressable TV: definition

So, what is addressable TV, exactly? Where traditional television advertising used to target viewers based on the programs they were watching – from which they inferred their demographic – addressable TV advertising is now able to target specific households via household IP addresses. The households in question can be segmented according to their geographic, demographic, and behavioral characteristics. They are then shown relevant ads while they watch their regular TV programming, when they live-stream content, or when they watch on-demand TV.

In other words, you can customize the TV ads you deliver to each household based on their demographics, habits, and interests. Addressable TV advertising thus allows you to reach more pertinent audiences through high-quality TV content. This means that targeted ads are no longer confined to Google or social media. Any connected device, including smart TVs and TVs connected to OTT content delivery systems can receive targeted ad content.

Addressable TV: how does it work?

Linear TV advertising traditionally selects a network or a program on which to advertise. Depending on the product or service you are trying to sell, you can use panel-based research to determine where and when you should broadcast your ads, and the only way to infer target audience filters comes from generic rules about segments of the population that are most likely to watch at that time. With addressable TV advertising, on the other hand, you could potentially serve a different, customized ad experience to every target household.

Addressable TV relies on consumer data safely aggregated and matched to their private IP addresses. By following the devices they own (and their cross-device behavior), the websites they visit, the times at which they watch TV and, of course, the programs they are interested in, marketers are able to build incredibly detailed consumer profiles.

The benefits of addressable TV

Addressable TV is such a powerful tool for marketers because it allows them to be intentional about who sees their messages when. For example, instead of showing your ad for a breakfast cereal for kids to every person who happens to be watching morning TV, you would be able to serve it only to families with children of the right age group. For people whose children are under three years old or over twelve, on the other hand, their data would reflect that your ad doesn’t match their immediate needs and wants, so you wouldn’t have to pay for an unnecessary impression.

Instead of showing your ad content to those who have no interest in it, addressable TV advertising can help you optimize your return on investment. This solution allows you to allocate your budget more effectively, all while ensuring that the viewers who do see your ads are the most likely to convert.

Difference between addressable TV, linear TV, CTV and OTT advertising

Linear TV is just a fancy new name for traditional television, the one where ads are based on the interests that people watching a certain program are supposed to be more likely to have. When considering the differences between linear and addressable TV vs. OTT and CTV, traditional linear TV really is the odd one out. The other three share the same principles, and the factors that set them apart from one another are only skin deep.

OTT – or Over-The-Top – refers to any targeted video ads shown through streaming devices. This includes computers, mobile devices, gaming consoles, smart TVs, and connected TVs, which use streaming apps such as Netflix, Hulu, or Disney+ to gain access to premium, on-demand video content.

CTV – or Connected TV – operates on the exact same principles as OTT. However, as the name indicates, it is limited to connected TVs and doesn’t include other connected devices. The main difference between addressable TV and CTV is that the latter is capable of leveraging data to allow advertisers to target very specific groups who watch paid content on a big screen. With addressable TV, people get the same experience as traditional TV albeit with custom advertising.

Example of addressable TV

Addressable TV advertising allows marketers to be way more specific in their messaging. Instead of targeting only age and gender across the whole linear landscape, they can tailor their ads to suit data segments that correspond to specific audiences.

For example, among the people who will watch the same action movie at 9 p.m. next Friday, only some are likely planning a trip to Europe on their next vacation. Out of these people, fewer still will be a 25-45, child-free couple with a $150,000+ income. Thus, an advertiser looking to sell romantic, all-inclusive vacations in the Mediterranean sea on board a luxury cruise ship can use addressable TV to show their ad only to those households who are a perfect match. They will not waste their efforts (and money) on trying to reach anyone who doesn’t fit these criteria.

How to successfully advertise on addressable TV

As with any other form of marketing, addressable TV advertising requires a solid strategy. You should begin by establishing your objectives and making sure that they are compatible with this particular format. What are you trying to achieve? You should also consider your maximum cost per acquisition for the lifetime of the campaign, and ensure it matches your budget constraints.

Once campaign goals are clear, define your target audience, which should be at the heart of your strategy. Addressing a highly specific demographic is of no use if you don’t know what that demographic should be. To establish your viewer personae, you can work with a third-party data provider or try A/B testing with smaller test campaigns. This will help outline a sizable audience on which you can focus your efforts.

When developing ad creatives, make sure they are suitable for addressable TV and have the right aspect ratio (16:9), bitrate (at least 5,000 kbps), duration (both 15 and 30 seconds), and a compelling CTA.

Then, it’s all about planning your campaign and selecting a platform from which to launch. Vibe allows you to leverage both the precision of CTV and the impact of linear TV thanks to a simple self-serve platform with over 400 premium channels and apps to choose from.

Finally, don’t forget to measure the performance of your ads. This will help you understand what works and what doesn’t and see how effective (or not) every campaign adjustment has been. Don’t rush it, though, as it usually takes around 15 days after a campaign has ended to see exactly how well the viewers are responding.

In summary, addressable TV advertising uses the power of data to bridge the gap between the traditional TV-viewing experience and web-based advertising practices. It allows marketers to take advantage of the full-screen format and the engagement that comes with it all while offering a level of targeting that linear TV couldn’t match.