Over the last 18 months, European broadcasters and TV sales houses have ramped up their efforts to attract new-to-TV advertisers that usually spend on search and social platforms. While many of these announcements have focused on lowering the cost of entry to TV using AI-enabled creative solutions, Sky Media has looked to addressable advertising to prove the effectiveness of TV.
Last week, the UK sales house released a new study analysing the effectiveness of addressable TV advertising. The study, ‘The Addressable Advantage’, analyses outcomes from 2,400 campaigns across 535 advertisers between 2020 and 2025, using data from Norman, Sky Media’s effectiveness databank. The results found that compared with linear TV alone, addressable campaigns deliver 2.1x uplift in awareness, and 3x uplift in incremental web traffic. By enabling advertisers to see their campaigns drive outcomes comparable to those on search and social platforms, Sky Media aims to encourage them to spend on addressable TV.
But Matt Hill, Director of Insight & Effectiveness at Sky Media, distinguishes addressable TV advertising from running campaigns on the digital platforms, where advertisers “hand over their credit card details to an algorithm.” While the ease of self-serve tools is particularly attractive to smaller brands, Hill argues that gaining a competitive advantage on these platforms is unlikely, since every advertiser is using the same tools. “As soon as everybody’s got the same capabilities, the only lever you can pull is how much money you spend,” Hill tells VideoWeek.
By contrast, TV is “still very much a relationship business,” and Sky Media works closely with agencies to build bespoke addressable TV campaigns. Hill notes that the sales house’s direct work with advertisers is minimal, and generally relies on media agencies for their expertise in planning and data.
“I think with general mass-reaching TV, your main competitive advantage is going to be your creative and what you invest in that,” comments Hill. “For addressable TV, it can be the sophistication of your planning, and your relationship with the media owner.”
Starting the TV journey
But that doesn’t mean a brand needs to start with linear TV before investing in addressable TV, according to Hill. “Addressable is probably now the best place to start on your TV journey, rather than go straight into linear, because it gives you that test and learn capability,” he comments.
Sky Media gives examples of advertisers using addressable TV for regional testing before launching a main campaign, including one fashion retailer that ran a £30,000 test campaign just in the North West region. According to the study, the main campaign was 144 percent more effective as a result of this test. And for established brands, addressable TV campaigns can help advertisers understand who their audience is, according to Sky Media, and even challenge long-held assumptions on that front. For example Center Parcs found addressable campaigns garnered high levels of response from consumers outside of its core family audience.
The study also highlights some of the key drivers of effectiveness in addressable TV campaigns, such as the use of targeting attributes and first-party data. The results showed that the top-performing campaigns used an average of 3.5 targeting attributes, versus 3.0 for lower performers. And campaigns that used first-party data drove up to 8x higher sales uplift and 6x higher incremental visits, making it “the biggest lever you can pull in terms of effectiveness.”
While it may seem intuitive that the more targeting and data one applies, the more effective the results, knowing what type of targeting attributes to use is not always obvious or can be counterintuitive, as in the case of Center Parcs. The study also found that campaigns can be equally effective at different levels of scale, and addressable TV can help advertisers find the “sweet spot” between effectiveness and efficiency. Meanwhile sharing first-party data can be difficult to justify from a legal and financial perspective, so being able to prove its effectiveness is crucial for brands sitting on a wealth of customer data.
That is not to say advertisers without a trove of first-party data won’t see results from addressable TV, according to Hill, but that campaigns that layer in first-party data see a pronounced uplift in effectiveness. “So if you’ve got it, use it,” he remarks.
Turning down the toxic
Navigating those legal components, targeting attributes and other work required to develop addressable TV advertising campaigns does however make it harder to activate than the self-serve digital platforms, though Hill argues this may not be such a bad thing.
“I think having something that’s not easy is important to be able to differentiate yourself from what everybody else is doing,” he says. “Having something that requires work and thought, and human input in a world of AI, is going to be increasingly important to get that competitive advantage. So as an industry we do need to make it easier to buy, but at the same time, I think there’s still always going to be an aspect of having stuff that’s unique. And if it’s unique, it’s not going to be a plug-and-play solution.”
Nor does Sky Media view addressable TV as a replacement for linear TV campaigns, but a way of making TV more competitive for ad spend at the bottom of the funnel. “Don’t get me wrong, this is not about taking money out of high-reach brand-building campaigns, which are still critical to driving effectiveness,” says Hill. “I see this more as reducing the barriers of entry for smaller advertisers, and increasing the potential of TV at the bottom of the funnel for larger advertisers through to small advertisers. The two work hand in hand.”
And with addressable TV now making up more than 25 percent of TV revenues, Hill says ”every advertiser should be considering it”, especially as AI continues to dilute search and social environments. “I think increasingly this is an opportunity that advertisers have to test to see if they can find a different way to fill that gap,” he comments. “And when you spend on TV, you are funding high-quality content, high-quality news and a good media ecosysytem, in a way that when you spend on social media, you’re not. So I think it’s right that a brand should be looking to experiment in this area and see what they can do to maybe turn down the toxic a little bit and up their spending in curated media that still drives results, but creates a really positive ecosystem for our culture.”
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