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Rich Astley 

How tech advances have paved the way for addressable TV

How tech advances have paved the way for addressable TV

New technology developments are expanding the opportunities for addressable TV advertising, allowing broadcasters to provide expanded solutions for building brands and driving marketing outcomes, writes Finecast's Rich Astley

Until recently, the options for addressable TV advertising were limited. If you didn’t work with a pay-TV operator such as Sky in the UK or Comcast in the US, then you couldn’t apply the power of pay-TV household data to targeted delivery of TV advertising.

However, technology is moving fast and key changes in the way consumers receive and watch audio-visual content on an array of screens are opening-up the market.

As IP-connected devices such as smart TVs and connected devices become increasingly popular ways to watch "TV", broadcasters have started creating their own addressable advertising products. As each broadcaster has pursued their own paths to addressability and competing offers, the marketplace has become even more complicated to navigate. The innovation and competition we’re seeing, however, has clear benefits for advertisers and their agencies who must make sense of expanded opportunities.

There are three key technological developments that marketers should be aware of to maximise the addressable TV opportunity and each is significant in its own way:

1. Automated Content Recognition (ACR) technology, part of the middleware (TV Platform software) in current smart TVs, will help to scale the delivery of targeted TV ads by solving for the identification of available inventory in real time.

ACR scans the audio and video imagery on screen to categorise it by programme, channel and viewing type (typically by matching it against a broadcast schedule). In smart TV homes, (currently 38% of all UK households according to Ofcom), ACR can be used to detect when a TV ad break is coming up. The broadcaster’s yield management (or ad serving technology) can then be polled to determine if enough targeted ads are available to fill an addressable TV ad break. If yes, then the broadcast commercials may be replaced with targeted ones, all while simultaneously managing potential compliance and clash concerns, of course.

Broadcasters in the UK and US are testing this potential new approach. ITV recently announced a partnership with Sorensen, while companies like Samba TV and Alphonso also have extensive ACR footprints with manufacturers. Building a critical mass of TV manufacturers and software providers, while managing data in a GDPR compliant world, combined with ensuring that the TV viewing experience is not negatively impacted - are all challenges to be overcome with this technology evolution.

2. Over-the-top (OTT) Devices or Connected TV devices such as Amazon Fire TV, Apple TV, Roku and Chromecast are revolutionising the way we watch television. Adoption in the UK is growing rapidly; price of entry is low (prices currently start as low as £25), and devices are easy to install and use. Ofcom states that more than a third of UK homes already connect to the internet through devices other than their television.

Because they have their own operating systems, OTT devices effectively replace the Electronic Programme Guides (EPG) on the TV or set-top box, providing intuitive, fast navigation to a whole new world of content, including all the main broadcaster on-demand players. Amazon’s Fire TV stick also has Alexa integration so customers can voice search for content and get results across multiple apps in seconds. 

OTT devices also encourage more on-demand viewership, often at the expense of linear viewing. Channel 4 is reportedly planning to make its All 4 platform ‘100% addressable’ with mandatory viewer registration across all platforms in 2018, and they claim to reach almost two-thirds of all UK consumers aged between 16 and 34.

Such viewer sign-ins provide All 4, and other broadcasters, with age, gender, and other data points, as well as consent for targeted advertising. When a viewer is logged into a broadcaster app on their TV or connected TV device, broadcasters can segment and dynamically target households, yielding higher CPMs than they ordinarily would get from selling standard BARB TV trading audiences, which are based on linear ratings. Mandatory sign-ins across all devices, as planned by C4 next year, should be applauded in their objective to prioritise addressability and connecting consumers across platforms.

3. Finally, the next generation of set-top boxes are also creating new opportunities. Current boxes utilised by UK pay-TV subscribers can very broadly be categorised into closed or proprietary platforms, such as Sky, or more open network boxes, such as YouView and EE TV.

Proprietary platforms are closed network systems where ads may be downloaded to the box and as a result, the ad-decisioning, reach or frequency management is not real-time or truly dynamic. The benefit to this approach however is that the viewing experience is safeguarded to ensure no degradation in picture quality due to internet bandwidth.

By contrast, open network boxes support multicast and IP streaming of on-demand content, blurring the boundaries between broadcast and streaming. This means integrations for serving ads are typically more standardised and can provide more real time data feedback.

Sky’s Adsmart is currently the only platform to offer ad insertion into linear TV, but capabilities should be on offer from other pay-TV operators in the next 12 to 18 months.

Clearly, technology is changing the TV landscape as we know it; distribution is becoming more fragmented, device functionality is continually improving and screen-level data is becoming more readily accessible.

These changes will make the choice of platform and content for viewers much broader, and the ability for marketers to reach them with single appointment to view events ever more challenging.

The time is now to experiment and innovate, to learn from new addressable technology capabilities and adapt TV advertising strategies for a new era.

Rich Astley is chief product officer at Finecast and is speaking at the Mediatel's Future of TV Advertising Forum in London on 6 and 7 December - for more information visit, click here.

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