Addressable TV is a method to deliver targeted advertising on digital TVs. Personalised advertisements can be delivered in real time based on the household composition, by means of a combination of audience analysis/clustering and delivery technologies.
Traditional TV has always used GRP (Gross Rating Point) to measure the pressure of advertising campaigns on their target groups, usually relying upon estimates derived from audience share data combined with audience profiling data coming from consumer surveys.
Today the digital TV provides additional data, allowing to cluster viewers based on the contents they actually see. In facts, if the devices used to access TV programmes are connected to the Internet (e.g. Smart TVs, Set Top Boxes, tablets, smartphones or PCs), modern tracking technologies, very similar to the ones in use on the web, provide information in real time about the programmes that are actually being seen in every single household, so that advertising can be targeted based on the household profile deriving from its consumption behaviour, by device.
In short, brands do not buy advertising slots in a TV programme based on the general target associated with that content, but rather they buy slots based on the household characteristics and, at the same time, they show contents that are relevant to the targeted household.
But brands can now reach a further level of sophistication: they can target individuals in the household, showing different advertising messages to each component of the family, or selecting individuals whom the message should be delivered to.
For example: let's assume that the analysis of the contents seen by household A and household B suggests that both can be described as "families with kids", and that the advertiser is a brand selling baby car seats. If the advertiser bought an advertising slot targeting "families with kids", no matter what content the household is viewing at that moment, he could never be certain that his message is actually seen by the grown-ups responsible for purchases. As a matter of fact, if the advertiser only considered the household composition rather than combining the information with the content being viewed at that moment, he could end up showing its advertising spot when the kids are watching TV.
If on the other hand, the advertiser included in the delivery criteria the classification of the content being viewed, he could choose to show its spot only to household A for instance, because household A is watching a TV programme targeting adult women, while household B is watching cartoons. In both cases, the advertiser would reach a family including adults responsible for purchases, but at that specific moment, the spot would be relevant only for household A.
Addressable TV systems like Neodata's can identify the household composition, classify the contents that each household is watching in real time, and select different advertising messages for each profile watching TV.
The segmentation of the audience is based on socio-demo, geographic and behavioural characteristics, and it can include consumption habits and stated preferences.
Addressable TV is the first step towards Programmatic TV, which allows broadcasters to trade advertising slots on digital TV in real time, at a higher value, while allowing brands to target a specific audience and measure ROI in an unprecedented manner.