British broadcasters have made separate moves to advance ad-tech in a further defence against online competition but questions of scale, cost and measurement remain. From July, Sky is extending its AdSmart technology to make addressable television advertising available across the Sky and Virgin TV footprint in the UK. It is also working with NBCUniversal, part of its Comcast parent group, to combine AdSmart with its NBCU's Audience Studio to create an international offering.
Meanwhile, commercial broadcaster ITV has found a partner to roll out a programmatic ad platform by the end of the year.
Definitions of "addressable" and "programmatic" often differ depending on who you are talking to, and the two are not necessarily mutually exclusive. By and large, programmatic relates to an automated, software-based buying mechanism, while addressable represents the ability to target and deliver ads directly to specific audiences based on user/household data.
Sky Expands AdSmart
AdSmart enables different adverts to be shown to households watching the same programme. This gives advertisers and brands the ability to tailor their campaigns to specific audiences and locations.
The Sky deal in the UK will give advertisers access to 30 million targetable television viewers across around 13 million homes, and covers both targeted linear channels and VOD advertising. Sky Media will be the exclusive advertising sales agent across the entire AdSmart network in the UK. Later this year, Virgin Media will also trial AdSmart on its free-to-air TV service in the Republic of Ireland.
"Aside from access to market-leading technology, the key thing that Virgin Media and parent Liberty Global gain from partnering with Sky is scale, not just of reach but also audience data, without which accurate targeting at scale cannot exist," says Matthew Bailey, Senior Analyst, Media and Entertainment, Ovum. "Integrating into one core platform will also make it easier for advertisers, for whom navigating an increasingly fragmented digital marketplace remains a challenge, to move more spend into addressable TV."
With NBCU, Sky plans to launch a global product. According to Linda Yaccarino, the chairman of advertising and partnerships at NBCUniversal in a release: "The world is getting smaller, and the opportunity for international marketers to make an impact with consumers is getting bigger. The industry has demanded a global premium video offering, and now, one will finally exist."
Bringing AdSmart to the U.S. and combining it with Comcast and NBCUniversal's tech and reach should increase its impact in both geographical markets.
"Ad Smart's technology is held in high regard amongst many in the industry, but its confinement to the UK and European market—which is quite far behind the U.S. in uptake and awareness of addressable TV advertising—has so far limited its overall market impact," says Bailey.
NBCU is also piloting contextual media planning to align brand messaging with relevant scenes across national programming to "enhance advertising effectiveness and provide a more coherent viewing experience."
The joint offer gives global advertisers the ability to plan and measure TV campaigns across international markets under a unified platform—something that can already be done in the digital world through the likes of Google and Facebook.
"There are dangers to a globalised approach to TV advertising," the analyst warns. "Consumer tastes and TV advertising market dynamics vary from country to country. Plus, regional broadcasters are already experts at cultivating the content required to engage specific audiences, and some may be reticent to cede control of inventory if the quality and tone of the ad experience doesn't match up."
He suggests that the employment of AI-enabled contextual alignment—which matches ads with broadcast content—should help here.
ITV Hub Goes Programmatic
ITV's deal with ad-tech specialist Amobee will see it launch a new programmatic, premium advertising platform as the broadcaster looks to scale up its VOD content. Amobee, owned by Singapore telco Singtel, acquired ad tech firm Videology last August.
"Currently, advertisers looking for short-term results will mainly avoid TV advertising in favour of digital, as planning and buying a TV ad is often involving and doesn't offer the near-instant visibility of return on investment found on digital platforms," Bailey says. "This also extends to broadcaster VOD, which is still often sold as an extension of TV, rather than an entity in itself despite competing with Google and Facebook in the online space."
Rolling out a self-serve programmatic platform will also enable smaller advertisers to target select groups of consumers through ITV Hub across multiple devices.
"Advertisers will benefit from the high-quality, brand-safe environment of TV without needing to invest the same amount of time and money required to buy and run a traditional TV ad campaign," Bailey says. "This kind of mechanism will grow in importance for broadcasters and other OTT video service providers as more players start to explore hybrid approaches to monetization, including both subscriptions and ads."
While more broadcasters are starting to experiment more with this kind of technology, there are still several creases that need to be ironed out before it becomes the norm. The issue of measurement, for instance, remains a hotly debated topic in the industry.
"More collaboration will be required across the TV ecosystem before a consensus is reached on exactly what can and needs to be measured to bridge the gap between broadcast and digital/OTT viewing, although some progress has been made in this area," Bailey says.
It's worth noting that what ITV has announced relates to its digital inventory—applying this kind of technology to linear, broadcast TV advertising represents a completely different challenge.
"While programmatic platforms are often seen as more efficient and less expensive than traditional ad sales channels, re-educating less agile advertisers and realigning decades-old processes to fit into a programmatic-first TV advertising environment will require both time and financial investment. And, even once this has been achieved, it is likely that significant human input will still be required – you just need to look at the issues faced by Google and Facebook over the past few years to see why."
Bailey adds that addressability has a big part to play in increasing the value of TV advertising for broadcasters and MVPDs, "who should see an uplift in CPM for addressable ads;" for advertisers, "who can effectively target TV ads at a much more granular level;" and consumers, "who will see more relevant and useful ads."
"But TV advertising's biggest strength has always, and continues to be, the ability to reach large, mass, simultaneous audiences with big brand messaging campaigns. As such, it's probably not a case of whether we are able to [deliver ads tailored to zipcode] but rather a case of whether there are enough advertisers that want to."
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