Audience segmentation goes beyond social media with 'Addressable TV'
Digital channels have perfected the art of user-specific advertising. Facebook shows you ads that are relevant to your interests, and you’ll often visit a website and see an ad for an item you recently researched but didn’t purchase. Display ad marketers use 'retargeting' to recapture lost potential sales and drive conversions.
Now, this same digital concept can be applied to television which enjoys the largest audience reach of any media today at 96%.
Addressable television allows marketers to show specific commercials to certain viewers after segmenting them based on data-driven household profiles; the technology to enable addressable television only requires the IP addresses from set top boxes, which allows a TV’s Nielsen data to be integrated with the data from other devices and databases.
Addressable TV campaign with Chevy and DirectTV &DISH
To get a closer look at how addressable television works, we can take a look at a case study featuring Chevy and DirecTV &DISH. In Q4 2013, Chevy launched an addressable television campaign for their 2014 Silverado through DirecTV & DISH. Chevy withheld 10% of the marketing for a traditional TV ad buy in order to measure ROI.
DirecTV & DISH were able to combine their subscriber profiles with profile data on people likely to purchase a vehicle soon, in order to specifically target households likely to be looking for a new truck.
The result? Chevy received a $23 return on every $1 invested, and addressable television households were 5.6% more likely to purchase than traditionally targeted households. Plus, addressable television also led to an amazing 26.2% lift in sales within Chevy’s truck-purchasing target audience.
In the future, we may see addressable television integrated with digital channels to provide the strongest impact and the greatest return on investment. Advertising campaigns will span various media and digital channels, allowing customers to view a commercial on the television and then purchase online. Industry leaders predict that one-fourth of TV ad budgets will be spent on addressable TV within three years, and yet Americans’ TV habits likely won’t change until at least five years from now meaning that now is the time to start investigating addressable television for your business.
We have produced an infographic to explain how it works and our thoughts on its future
Thanks to Signal.co for sharing their advice and opinions in this post. You can follow them on Twitter or Facebook.