Although the penetration of linear addressable households is still relatively low (addressable TV generates about $200 million-$300 million in spend compared to the $70 billion linear TV ad market whole), media owners have started recognizing the value of digital as a way to access incremental demand.
One of the challenges is for everyone in the ecosystem to agree on measurement, since many subscribe to broad Nielsen age and gender ratings despite the fact that advertisers want more granularity – for instance, buying households making $100,000 and that have pets.
“Those basic business questions need to be sorted out, but you’re seeing exciting movement from some of these major media companies who are thinking how to empower their teams in a way that enables new ways to sell,” said Jason Burke, VP of product for Clypd. “We work with cable operators, who are more likely to [look at] incremental demand, but [a premium network] might think more about enabling their sales teams.”
Univision Local Media, an early Optimize client, noted the need for a yield optimization tool that considers the nuances in pricing and inventory structures – spot-based by geography or specific market vs. network, for example.
Although TV may never be sold on an impression-by-impression basis (but never say never), media owners see the benefit of enabling finer audience targeting and availing previously untapped inventory streams to advertisers.
“We’re seeing a lot of marketers and media owners start to think about income, education and ethnicity,” Burke said. “As [advanced targeting tools] prove themselves, then I think you’ll start to see plans around actual ROI and how many cans of soup actually came off the shelf."
"You’ll see the data impact on how that buy or sale is constructed, and then come back to the common currency like Nielsen to measure the overall efficacy of the campaign," he added.