New research sizes up the addressable TV sector

  • 5 minutes read
  • Global
  • 27/06/2023

The addressable TV industry is dynamic and is very much in a period of growth. Spanning a range of existing and emerging platforms and technologies, addressable TV offers media buyers a dizzying array of opportunities to target and reach key consumer groups with sophisticated creative material. 

According to new research by Ampere Analysis, addressable TV represents a significant portion of video advertising spend – one-sixth of TV and video budgets worldwide.

Here's what research found:

1. Incremental reach is a key reason for using addressable TV

Many marketers see addressable TV as the key to delivering TV-quality creatives to demographic groups who are hard to find via traditional broadcast TV. Addressable TV platforms offer significantly greater reach among younger audiences. As such, some marketers focused on these groups spend with addressable TV services first, before looking to other media like broadcast TV.

2. Addressable TV is perceived as more cost-effective once marketers start to use it

“Addressable TV is expensive” is a phrase typically heard from marketers not using addressable TV. CPMs are seen as much less intimidating by advertisers that have already taken the leap, and for whom campaigns are delivering meaningful return on investment (ROI). For these marketers, addressable TV is comparable in cost-effectiveness to other formats, despite its headline price points.

3. Dynamic – or addressable – creatives permit rapid message customisation to targeted audiences

One of the emerging use cases for addressable TV relates to creative optimisation. Different creative versions can be delivered to different audience segments, allowing for evaluation of the creative impact, or tailoring of messages to suit demography, geography or other viewer characteristics.

4. Education is important to counter common misconceptions

More work is needed to ensure everyone is aware of the potential of addressable TV. Even the term “addressable TV” is not universally understood. Many marketers in this study were unaware of some of its basic capabilities, such as geotargeting. And even in many developed markets, some brands still thought that addressable TV’s reach was too low to be of use for brand campaigns – despite the technology having comparable monthly audience reach to broadcast TV. Educating industry stakeholders must be a key objective for the addressable TV sector if budgets from these groups are to be attracted.

5. CPMs are not the only cost that platforms and agency partners should consider

Addressable TV – through selling specific audience segments – removes barriers to entry for smaller brands. But smaller marketers are still less likely to be using addressable TV. Small or medium-sized companies are often sensitive to the time costs of planning and executing addressable TV campaigns. And the costs of generating and adapting creatives to target different user groups are also a concern for such marketers. For service providers and agencies, offering solutions to simplify and reduce non-inventory overheads will be important to securing greater buy-in from smaller advertisers.

6. Addressable TV widens the advertising pool, but this carries additional data-matching requirements

A key advantage to offering addressable TV is that it attracts marketers with both brand-advertising and performance-marketing mindsets, growing the pool of potential advertisers and the market opportunity for service providers. But this cuts both ways, as performance marketing-centric buyers also expect performance marketing-style data. In APAC specifically, many addressable TV buyers have a grounding in search and social media leading to demand for more, and better, data. While universal measurement solutions are still being worked on, addressable TV platforms need to ensure they have stepped up their game around data matching and data partnership solutions, offering media buyers tools to target audiences more finely, and trace the effect of campaigns on behaviour.

The highlights

Get a snapshot of the story in these infographics

Discover more in our webinar

To learn more about the findings, watch the replay of our webinar with Ampere Analysis. Ampere’s Richard Broughton outlines the size and trajectory of the addressable TV market, and reveals best practises for using and deploying addressable TV. This is followed by a Q&A's with industry experts on how media buyers should be thinking about addressable TV. The session will also explore some of the takeaways from over 100 interviews conducted with brands, agencies, broadcasters and streamers.

Watch the sessions:

Session 1, with Gerhard Fourie, Global Client Partner, Finecast and Marlot van der Stoel, Global Precision Content Director, Wavemaker.

Session 2, with Gerhard Fourie, Global Client Partner, Finecast, Oliver Joyce, Head of Worldwide at Mindshare and Joanna Avery, Head of Client Engagement, Finecast

Download the study

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