Baby steps: addressable TV predictions for 2018

Advanced TV is still finding its legs. What does 2018 have in store?

We’ve seen a crawl toward programmatic improvements thus far, with more marketers embracing the automated buying process across linear TV. Some progressive marketers have taken more significant baby steps in the addressable space, looking for more one-to-one household targeting in TV.

While no one predicted a massive changeover in 2017, people are eager for advanced TV to come faster. Though programmatic TV spend tripled last year alone, according to eMarketer, the reality is that programmatic and addressable started off as tiny niches. Over time, both will become much bigger. In the meantime, the TV industry would benefit from adopting the data-driven digital media practices forged originally to solve for cross-device and attribution. That is the biggest opportunity we have in 2018 as the TV industry continues to confront the fact that massive changes will take few years.

TV will take a cue from digital

By and large, TV buying is still done the way it was 10 years ago. If you’re purchasing a TV ad, then you look at demographic data and see what show over-indexes to this demographic. If you’re trying to reach men between 35 and 50 who make more than $50,000 then you choose ESPN because it over-indexes to that demo.

This, of course, is an antiquated and inefficient approach when compared to online media buying. In the online world, an advertiser can pinpoint the right people to target, based on their demographics, their online behavior, purchase intent and massive amounts of offline data. The result is better and more efficient targeting.

We don’t have to wait to for all of TV to change to start grafting such digital buying approaches. We can use best practices from online targeting in the addressable TV space. For example, marketers can use offline data and predictive modeling to calculate a score that represents an individual user’s likelihood to convert for a specific brand, just like we do online.

In the digital space, marketers have been a catalyst for increasing cross-channel capabilities. As TV viewers cut cords and use new devices and platforms to keep up with the Kardashians, addressable TV will require the same cross-channel mindset to reach households effectively.

TV will start using real-time bidding

Actually, this is already happening. Google is providing the ad-serving technology for CBS’s All Access Star Trek series, which has 2 million subscribers. Google will deliver ads for the CW, AMC, Lifetime and Bloomberg as well.

Presumably, Google is using its expertise from its DoubleClick acquisition to serve TV-based ads in the same fashion that it serves video ads online — via real-time bidding and people-based targeting. SlingTV also offered real-time buying during the NCAA basketball tournament in March and April.

The TV industry’s culture will start to change

The brands that propelled programmatic in digital by demanding better ROI, lower CPAs, and better conversions, will prompt change in the TV industry as well. Admittedly, there’s a lot of hesitation. The TV industry is still profitable, and many media sellers are right to fear that programmatic buying will lower those profits as it wrings efficiencies from the process.

Many buyers are content to keep using the same tools they employed three or five years ago.

But change is on the horizon. Though programmatic and addressable will not make dramatic inroads in 2018, for many, the writing is on the wall. Forward-thinking media buyers will embrace this change and challenge the idea of clinging to the status quo.

Overall, what we’ll see in 2018 are baby steps toward advanced TV. The giant steps are still a few years away, but we’re already feeling their reverberations.