The theory of targeted advertising is that less can be more, that by dividing an audience up into segments, the total value of the inventory is increased. Each segment receives a relevant ad more likely to elicit a positive response and so its value measured in CPM (cost per 1000 subscribers) goes up. But standing in the way of this goal is fragmentation, because if multiple audiences across different channels and services are split into separate targeted segments, the size of each one can become too small to register significant uplifts for brands, or revenues for operators. Commercial forces have operated in both directions, towards and away from convergence around common standards or platforms, whether proprietary or from industry bodies.
This conundrum has shown up in the UK for example, where Sky’s AdSmart platform was one of the first in the world to establish significant benefits for addressable advertising within a legacy pay TV service, as opposed to online video. Its relative early success led to archrival, Liberty Global’s Virgin Media cable service, adopting AdSmart to deliver ads to specific households, in combination with some in-house developed technology. Launched on Virgin Media in July 2019, this expanded AdSmart’s reach to 30 million viewers, with Sky Media as exclusive advertising sales agent across the entire UK network.
UK FTA commercial broadcaster Channel 4 has also joined the AdSmart party, but the larger ITV has resisted the move in the belief it can capitalize on addressability more by developing its own platform and then gain market share from the others. So, ITV has instead partnered with ad tech firm Amobee to deliver automated programmatic buying in association with addressability via its ITV Hub. Programmatic buying, involving automation of trading inventory, involves separate issues and can be deployed with or without addressability, or not at all.
Similar dichotomy between unification and fragmentation has occurred in other countries, including the US. Cable operators there have been uniting within a nationwide club of MSOs now rebranded as Ampersand and formerly known as NCC Media, whose members are pooling their viewership data enabling advertisers to assemble fragments for targeting across the whole cable TV footprint. Members include Comcast, Charter and Cox, with the total addressable audience now 85 million households.
While this is an impressive audience size, Ampersand is still no more than a unification of cable footprint such as has already happened effectively in several major European markets, including the UK and Germany. It does not include DTH or IPTV operators, or standalone OTT providers.
The initiative does however increase momentum behind the recently launched OpenAP advanced TV advertising consortium, which has been chosen as its partner. OpenAP launched its more advanced advertising marketplace dubbed OpenAP 2.0 in October 2019, incorporating some technologies originally developed for digital rather than TV platforms.
The consortium OpenAP, comprising Viacom, NBCUniversal, Fox and Univision, launched its first 1.0 version in 2017 to standardize the underlying audience segmentation process, so that brands could create targets on the basis of attributes such as women intending to make a car purchase. The 2.0 version then automates the associated workflow, making programmatic trading possible and allowing advertisers to plan and buy campaigns across each publisher’s owned-and-operated TV footprint. This footprint could be linear, connected TV (CTV), on-demand, mobile or PC/laptop.
The OpenAP movement is also of interest to another initiative gaining force whose significance is that it brings the TV and advertising side of the equations together. This is a collaboration between the Global TV Group on the broadcasting side and World Federation of Advertisers (WFA). The Global TV Group is made up of industry trade bodies such as Screenforce, UK commercial TV marketing body Thinkbox and the US-based Video Advertising Bureau (VAB), to promote a TV Charter establishing transparent measurement of advertising in the video ecosystem. The aim is to stimulate and enhance measurability and transparency of data and accountability for all video advertising around common standards and metrics.
Then the WFA is a medium for advertisers to air their requirements for cross-media measurement, aiming to reach a cross-industry consensus on key principles by working with TV companies, online players and analytics firms.
All parties seem to agree that such consensus is essential to take advanced advertising forward, even if like Sky AdSmart they have profited by being early adopters themselves. So as Jamie West, Group Director of Advanced Advertising at Sky, commented: “To compete in this era of transformation and increasing digital competition, TV must evolve and adapt to the challenges of a multiscreen and cross-platform environment and in doing so, set the bar high when it comes to the measurability, transparency and accountability that marketers demand and deserve.”
West chimed with the TV Charter as a whole in its view that although progress has been made around a number of proprietary offerings, they only solve part of the equation and progress will stall unless common standards for viewability, transparency, accountability and data comparability are reached.
But when that has been achieved, addressability will start to yield benefits not just for targeting segments but also for enhancing the value even of blanket generic adverts shown to everybody by, for example, tailoring their timing and frequency to specific households or even viewers.