With eight U.S. multichannel video programming distributors (MVPD’s) offering addressable television inventory, inadequate scale is becoming less of an issue. But achieving the “holy grail” will require a new approach to the cost of creative production.
That goal is “to be to find the right segment and then create all these different creative executions for the ads to resonate at higher rates,” says Jamie Power, COO of addressable inventory aggregator one2one Media.
Right now, “the majority of clients are only using addressable as a means to increase frequency against high-value households simply because they can’t afford to do four spots,” Power explains in this interview with Beet.TV at the Advanced Advertising Summit. “And it works.”
But it works even better when advertisers create multiple spots. “We see that it resonates at higher rates and we see higher ROI. But then when you factor in the cost of the creative, then the ROI goes down. So we just need to work out the creative model.”
The traditional creative model “doesn’t work because creative is too expensive. So I think there’s going to have to be modifications made to efficiencies around creative so we can have different segments against different creative units.”
Over the past half-dozen years, addressable has been expanding to ever-larger scale “but it’s been challenging for advertisers to execute,” Power says.
one2one Media aggregates inventory that can now be targeted to some 63 million households and, by the end of the year, to 70 million. It has data from 7.5 billion impressions that can be mapped to every type of business outcome.
“I’m able to understand what a brand wants to do and then I can start a plan at an optimal place. We also have integrations with all the providers to get the back end media delivery.”
The company still works mostly with agencies but as some marketers take programmatic media in-house they are considering programmatic addressable. “The clients that we work directly with, they put that in their programmatic bucket,” Power adds.
She says addressable can work for any product/service category “As long as it’s the right use case. If a client tells us what they want to achieve, I think there’s an application for addressable.”
The plethora of data available enable Power to show sellers “what a client can pay to make sure that the ROI is going to pay out. A category like CPG is obviously going to pay a lower CPM than auto or financial.”
While addressable ads won’t be going the route of other media inventory during Upfront negotiations, “I think clients will hold money back for these data driven tactics in television.”
This video was produced at the Advanced Advertising Summit in New York. Please find more videos on this page from the Beet.TV series presented by 4C.