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20 May 2021

CBS launches eleventh-hour addressable roll-out across broadcast

Despite the grinding, slow start, it does seem that 2021 is the year in which the roll-out of addressable advertising is making some notable progress. CBS has announced plans to make addressable advertising available across its broadcast network in the latter half of this year, with smart TV inventory getting a look in, too.

This follows ViacomCBS delivering the first ever addressable ad within a live national broadcast in January to select Dish Media set tops. Now the network wants advertisers to know that the flood gates are open, although we imagine the slow trickling momentum will persist for some time.

The new addressable inventory will be carved out from the space where CBS traditionally runs its promotional material for its own shows, that is, the space between a TV show and the first or last ad segment of a commercial break. Clearly CBS has realized that it has lost the content war, and is ditching the poor value proposition of promoting its own library in favor of squeezing every last monetizable drop of ad inventory from its service while it still can.

It seems the big brands that pay ViacomCBS’ bills are driving that message home. “As linear ratings continue to decrease, it is more important than ever to ensure that our media dollars work harder for us,” says Jimmy Bennett, vice president of marketing for Wendy’s, a fast-food chain which found addressable ads were 22% more effective than regular spots.

Network execs are arguing that the new addressable capabilities offer advertisers two channels of targeting. One is bulk purchasing ad spots according to viewer niches, while another is creating multiple versions of the same ad to be shown to appropriate viewers – an insurance ad featuring motorcycles or apartments, for example.

So, the distribution channels for addressable ads will be there, but how are audiences being targeted? ViacomCBS’ website suggests that advertisers will use third-party data firms, such as Neustar or Acxiom, to create an anonymized target list of consumers based on credit card data. MVPDs are then able to segment their customers via household level demographic and viewing data to match households with advertiser’s demands.

Although no vendors have been confirmed in the announcement, we imagine ad tech vendor Adcuratio has stayed on the team since its activation and signaling technologies powered the successful national trial at the beginning of the year. Adcuratio developed the ad spot markers with which ViacomCBS loaded its broadcasts, allowing Dish set tops to replace broadcast ads with pre-downloaded targeted ads.

It is important to remember, as is always the case with addressable, that the arrival of nationwide capabilities does not equate to nationwide coverage. ViacomCBS notes on its website that less than half of US households had the technology to receive addressable ads in 2018, and this number is likely still under two thirds of the total TV watching population.

The successful trial in January was only executed across a select number of live campaigns within Dish’s 9 million household footprint, meaning that for this announcement to be significant, ViacomCBS and Adcuratio will have had to have integrated with most major MVPD’s linear CPE in the US.

Comcast is not out of the question, as Dish Media has used FreeWheel in the past to optimize ad campaigns across addressable linear TV and demographic based audiences. Equally, AMC Networks announced in November that it planned to run multi-distributor, linear addressable TV campaigns across Charter and Comcast networks in partnership with Canoe Ventures.

Networks are caught in an arms race against MVPDs and TV OEMs to cash in on addressable advertising, only the fight for the networks is more desperate, as linear inventory is their only horse in the race. Whenever linear TV churns into irrelevance (our research wing Rethink TV estimates this to be 2032 if current trends continue), MVPDs will have access to any OTT platforms within their empire, while OEMs will have access to any content playing on their screen.

OEMs also have the trump card of being the only stakeholders with a bird’s eye view of user activity on a screen, and therefore can best improve the UX through frequency capping – ensuring that ad creative does not repeat enough to frustrate the audience.

This news comes just in time to spark some passion into the Upfronts, which have wilted next to the AVoD-focused New Fronts, so potent is the belated hype surrounding OTT and digital advertising. The rule of thumb in inventory buying circles has become that linear is used for scaling a brand, while digital is used for building incremental reach with highly targeted posts.

However, Faultline has consistently been shocked over the past year as video services and ad tech companies announce new ‘technological feats’ that enable better targeting, only to find out that these were features we presumed already existed, given the snooty regard with which digital ad tech considers linear.

SVP of Advanced Advertising at ViacomCBS, Mike Dean, argues that the new model will allow advertisers to continue pursuing both channels, via the unified back-end EyeQ platform offering advertisers access to all formats of ad inventory across the network. ViacomCBS already sells addressable inventory on its cable networks, and there are fewer concrete plans to roll out addressable to smart TV inventory at the same time as the broadcast rollout.

As always with addressable, we cannot help but feel it is too little, too late. Rethink TV has forecast that linear addressable revenues in North America will grow to over $3 billion in 2025, up 166% from $1.15 billion in 2019, but this is absolutely dwarfed by the projected $92 billion total advertising revenues expected in the region by 2025.