Urban Science
November 6th, 2023

Embracing new “addressable” strategies for greater connected TV results

There’s good news for consumers who enjoy watching video content and the advertisers trying to reach them. It is becoming less and less likely, because of the addressable nature of many platforms, that those who have opted out of cable TV and cut the cord will see advertising that isn’t relevant to them.

Yes, it is becoming more common for cat owners to see cat food commercials instead of dog food spots, and less common for people who have just bought a car to see car ads as if they are weeks or months away from buying a new set of wheels. And that is not because viewers are getting better at filtering, but rather the platforms and media planners and buyers are starting to work together more closely and with better strategies to reduce the frequency that a consumer will see an irrelevant ad.

What is addressable TV vs. connected TV?

Addressable TV is a method of delivering targeted ads to digital TVs that have a cable connection, whereas Addressable Over-The-Top (OTT)/Connected TV (CTV) is a method that delivers targeted ads to any device used to stream content via Internet services. The main difference between Addressable TV and Connected TV is that the latter is capable of leveraging data to allow advertisers to target very specific groups who watch paid content on a big screen. With addressable TV, people get the same experience as traditional TV, albeit with custom advertising.

With the exploding CTV landscape and channel options, auto companies, to name one industry, are keenly interested in investing ad dollars with these content platforms as data and targeting algorithms make it easier to reach consumers with messages they won’t be tempted to shut out. According to Gitnux MarketData, more than 80% of households had access to at least one subscription video-on-demand service (SVoD). Almost 40% subscribe to three or more SVoDs. The audience for addressable ads is there.

Digitally powered TV environments offer significant advantages and opportunities to advertisers, publishers and agency buyers. What are they?

  • Create more effective targeting—reach the right audience with the right message, reducing ad waste and saturation.
  • Connect video investments directly to consumer actions, creating the ROI from upper-funnel awareness to lower-funnel conversion to offline sales.
  • With the right data, advertisers/agencies can see the entire picture of the customer journey of touchpoints across channels and platforms and plan media for greatest outcomes.

Addressable and CTV are true game changers if advertisers and agencies have access to the data and solutions to unlock its full power. When content distributors have the architecture to leverage viewing data into patterns that auto advertisers can action with ads targeted at consumers based on their clicks, streams and categorized attributes — such as serving an ad to those who are truly in market to buy a vehicle in a specific segment like electrical vehicles or minivans.

With that level of data, the advertisers can benefit from knowing how to exploit more productive targeting, superior ad sequencing and cross-device tracking. Companies are far better able, compared with even a few years ago, to deliver more meaningful, effective reach, measure the effectiveness of their overall advertising strategies and determine whether the media reach influenced buyers.

ROI and strategic ad suppression

Better-performing targeting easily justifies increasing ad investments. That level of targeted media may cost more, but ad relevancy, on top of reach, is the holy grail. You might reach the same number of consumers, or even the same consumers, with messages and content that is dumped into the marketplace via cheaper, broader media buys. If you’re smartly using data to remove recent buyers, though, then you’re avoiding waste.

Publishers and streaming services need to invest in the right data partnerships to actually create the targeting products advertisers want, which will help position themselves to get their rightful piece of the pie in the Connected TV boom.

What is at stake? Over half of U.S. consumers no longer pay for cable TV or other traditional pay-TV services. According to a report from the Insider Intelligence, 47.6 million American households are now cord cutters. They also report by the end of 2023, 54.4% of all Americans will no longer pay for a traditional cable TV service. That’s a lot of lost eyeballs if we aren’t smarter about following them where they are going.

Advertisers are increasingly able to balance quantity and quality. Just reaching large numbers of consumers is no longer the goal, but rather delivering impactful reach, meaning leveraging the best addressable platforms with the best data to ensure they are investing to connect with the most meaningful consumers for their brands.

Over half of U.S. consumers no longer pay for cable TV or other traditional pay-TV services.

Actionable data is key

Working with partners who provide actionable data gathering and analytics will lead to improved targeting, superior ad sequencing and cross-device tracking. And although there may be additional costs for advertisers, it will lead to more effective strategies, and significantly higher ROI from media campaigns.

Here are two strategies to consider, using the automotive vertical as an example:

  1. Build audiences and target them with precision; leverage granular data (segments, geography, trim level, purchase history) to ensure you’re delivering the right ads to the right people. This reduces ad waste and over saturation, while improving personalization and ad relevance. For example, an advertiser for a luxury brand can “address” its buy to consumers in a certain economic and geographic set, while suppressing ads to those who have purchased a vehicle in the last six months or a year, or who aren’t and won’t be in-market for a luxury vehicle. The quality of messaging to the right people is critical to creating a consumer experience that builds brand equity – and critical to a truly effective campaign for advertisers.
  2. Look at the marketing funnel through a new lens – leverage deterministic data to connect consumer engagements to actions – including offline vehicle sales. With addressability you can make these connections at all levels of the funnel, and you can be strategic about when/where you apply it. Offline sales likely isn’t your primary metric in the upper funnel, but it can play a role.

Act now, trust in the data

Automakers are demanding accountability that only addressability can deliver. They are no longer writing blank checks for massive media buys. And advertisers and publishers alike need to be able to prove that their strategies are working to get their piece of the budget pie.

The more relevant advertising messages are, the more likely consumers will be to engage. Addressable TV offers massive advantages to both advertisers/agencies and publishers that when paired with data from the right data partnership, get better, more targeted advertising, and closed-loop measurement capabilities.

According to Jim Johnson, vice president of account planning and lead of automotive solutions at VDX. tv, a global video advertising technology company, “Both the television and automotive industries have a long history as staples of American culture, and in many ways, they’ve supported each other’s growth over the years. With the advances in targeting capabilities on TV, we’re now able to leverage the biggest screen in the household to facilitate conversation amongst family and friends in a highly relevant way.

For example, we can focus on generating excitement for a model launch by showcasing off-road capability to households that previously exhibited interest in outdoor activities, and dynamically change the creative for households that care more about fuel efficiency for their daily commute. This level of relevancy is a game changer for auto brands, allowing them to maintain the impact that TV has always had on building their brands, while also ensuring that the viewer is seeing messaging that’s the most tailored to their real-time needs.”

The more that agencies lean in on accountability and strategic measurement, the more the publishers will do the same and create a richer ecosystem of insights and media plans. Everyone wins. The only organizations left behind will be those that aren’t keeping up with the benefits of addressability.

Science as a solution

Since our founding over four decades ago, our proven, scientific approach to automotive retailing has continued to improve and evolve. It’s an approach that stays ahead of the technological curve to help improve marketing, sales and service performance – and continues to be the industry standard – giving you the best opportunity for success.

Urban Science® is continuously working to help auto marketers unlock automotive insights for sales matching to exposures in a multitude of major platforms, helping them put their campaigns in drive. Our In-MarketAudiences™, SupressionAudiences™ and SalesMatch™ solutions help automotive marketers better target their customers and attribute sales. Our DataHub™ contains daily, consumer-level data to help you find exactly who is in-market to increase the potential of your advertising spend.

Let us show you how we can apply the power of science to your challenges. If you’d like to talk to someone at Urban Science about how MarketGrowth can help analyze the many factors impacting your buy/sell dealership decisions, call or email me.

Carl Matter
Director, Media Performance
cwmatter@urbanscience.com
(313) 748-7525

1. This survey was conducted online by The Harris Poll on behalf of Urban Science among 3,022 US adults aged 18+ who currently own or lease or plan to purchase or lease a new or used vehicle in the next 12 months (referred to in this report as “auto-buyers” or “auto-buying public”), and 250 U.S. OEM automotive dealers, whose titles were Sales Manager, General Manager, or Principal/VP/Owner. The auto-buying public survey was conducted from January 26 to February 15, 2023. Data are weighted where necessary by age by gender, race/ethnicity, region, education, marital status, household size, household income, and propensity to be online to bring them in line with their actual proportions in the population. The dealer survey was conducted January 26 to February 17, 2023. Results were not weighted and are only representative of those who completed the survey. Respondents for this survey were selected from among those who have agreed to participate in our surveys. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +2.6 percentage points for auto-buyers and +6.2 percentage points for dealers using a 95% confidence level. This credible interval will be wider among subsets of the surveyed population of interest.

All sample surveys and polls, whether or not they use probability sampling, are subject to other multiple sources of error which are most often not possible to quantify or estimate, including, but not limited to coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments.

2. “Ford, GM See Strong U.S. Consumer Demand for Vehicles,”
autonews.com/retail/ford-gm-see-strong-us-consumer-demand-vehicles

3. “Q1 Sales Get Boost from Fleet Business,”
autonews.com/sales/q1-auto-sales-rise-85-countering-recession-fears

4. “Automakers Rights to Reassign Buy/Sell Deals Targeted,”
autonews.com/dealers/bills-would-strip-automaker-influence-dealership-acquisitions

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