Don’t Buy Addressable TV Until You Answer These Questions

[A version of this post originally appeared in AdExchanger.]

Addressable TV advertising is gaining momentum, with total annual spend projected to exceed $3 billion, according to eMarketer. If you might budget for addressable TV advertising this year, you should know the important questions to ask before you dig in.

Like any emerging medium, the noise and hype can drown out the signal. So it’s important that this year, brands ask tough questions about what their addressable TV media spend should accomplish as part of the overall marketing mix.

Are you really engaging a national audience?

Building brand awareness requires the largest scale possible. TV is the premier reach medium, and its sight, sound, motion, and attentive audience are all important factors to building that relationship. (In fact, TV ads command twice the active viewing of YouTube and 15 times the active viewing of Facebook, according to research from WARC.) So naturally, marketers will benefit from the biggest pool of possibilities to draw from even when targeting a specific segment.

Many TV providers may claim access to a national audience, but what they really mean is “national” within their owned footprint. That’s because the likely don’t have subscribers in every  designated market areas (DMAs) in the U.S.; and further, even within their subscriber base, it’s likely they haven’t upgraded the set-top boxes of every subscriber to enable targeting at the household level. At CES this year, wireless providers, cable operators, and over-the-top (OTT) providers all discussed next-generation upgrades to the home, but those rollouts will take years to cover a true national audience.

This means you may believe your potential total reach is the full 75 million U.S. addressable households, but in reality that starting point is much smaller. When you begin segmenting audiences on top of that smaller pool, your addressable campaign might only ultimately each a very small percentage of targets.

As such, it’s important to ask questions to be clear on the math behind your plan’s audiences. Without this critical examination before your campaign runs, your results might be disappointing.

What are you learning?

We are in an era where demographic insights are no longer acceptable as sum total campaign results. Marketing organizations are shifting to analytics-driven planning, increasing business impact by constantly improving and learning through attribution and modeling.

Data-driven TV is an important part of this picture; campaigns today can leverage valuable data sets to provide in-flight feedback as well as detailed post-campaign observations about the changing habits of a brand’s target audience. Addressability in TV takes this even further – through a test versus control methodology advertisers can learn what messaging worked and what doesn’t work for specific segments or products.

Addressable can help marketers better understand particular audience segments as well. For instance, a major retailer we worked with ran an addressable TV campaign that revealed young single people to be good targets for driving incremental sales, and that targeting rural or suburban households was more successful than targeting urban households. Insights like these should influence not just other TV buys, but also the larger digital media mix and marketing strategy. It’s time to start thinking of TV as a part of overall media spend and not a siloed awareness channel that can’t connect to real business impact.

While planning for addressable, make sure your partner sets up your TV campaigns so that you learn things like things like ‘what’s the optimal frequency for a conversion?’; ‘what is the behavioral makeup of my audience?’; ‘what was the incremental impact on sales lift?’ and more. If they can’t, look elsewhere.

What business are you driving?

Vibrant TV creative should be the center of any closed-loop brand-building campaign in 2019. But most importantly, marketers can now measure the return on advertising spend (ROAS) against specific business KPIs such as direct sales, shopping cart growth, awareness vs the competition, share shift or foot traffic.

Advertisers and agencies must hold each other accountable to the right metrics. If all parties around the table aren’t aligned on business metrics, marketers won’t be able to show business impact from their TV spend. Campaigns should be constructed to deliver on moving the needle against a business need in the most efficient way, and as such, shouldn’t be optimized to qualitative metrics that wouldn’t hold up on a slide at a board meeting. Data-driven TV campaigns can ship product. In fact, we’ve seen return on ad spend four times or more greater than that of traditional network TV.

The cornerstone for all of these of this approach is the marketer setting the tone – providing their agency and technology partners with a complete picture of the true business objective, and encouraging analytical thinking. So as you greenlight your addressable TV advertising spend in 2019, make sure you ask the right questions to get what you’re paying for.