Why audience targeting may hold the key to the future of TV adverts
TELEVISION has long reigned as the dominant force in global advertising, accounting for almost 58 per cent of international ad spend in the first three quarters of 2013. But its crown may be slipping. In many digitally-advanced markets, TV’s share of ad budgets has already been eclipsed by online – the transition happened as early as 2009 in the UK. And while spending on global display internet ads grew by more than 32 per cent in the year to October 2013, European TV remained flat.
“TV is one of the mediums with the highest wastage,” says Phil Hall, joint head of investment at MediaCom. The uniform nature of most TV ads (all viewers of a programme see the same ones, at the same time) means campaigns are rarely as targeted as their online equivalents. The probability that the viewer of a football match will be receptive to Budweiser marketing is high, but online campaigns can be focused on those with a definite track record of buying lager. And for programmes with more diverse audiences (dramas or the news), the problem is even more acute. According to a 2013 analysis by Nielsen, as much as 70 per cent of TV ad spend can be wasted in this way.
But technological developments, including Sky’s AdSmart technology, offer a glimpse of the future, and may well help TV to remain an attractive platform even in digitally advanced markets.
On-demand video sites (4oD, ITV Player, YouTube) already make use of online browsing data to serve highly targeted campaigns; AdSmart takes this principle into the living room. Using post codes and customer names, it unlocks rich data from Experian about the viewers, including age and income band. Campaigns can then be pushed to the most relevant audience, with viewers in different regions and demographic categories seeing different ads during the break.
“The move to more targeted TV ads allows buying to catch up with planning strategies,” Hall says. “Before, you’d have data showing that 16 to 24 year olds were the likely viewers of a show. But in the future, it seems that we could actually buy individual viewers – a 24-year-old with a specific income, for example.”
Similar technologies are likely to become widespread across TV channels in the future, Hall says, and will bring in smaller, regional brands unable to afford nationwide TV campaigns in the past. A small car dealership, for instance, has been an early adopter of AdSmart. Such businesses are increasingly able to combine the instant appeal of TV with the efficiency of audience targeting.
Liam Ward-Proud is business features writer at City A.M.