SAN JUAN, PR – Like clockwork every year, predictions are made that addressable TV is nearing a tipping point and will soon become ubiquitous. But TV buyers and sellers are still coming up against significant headwinds that have slowed adoption.
“There’s this dark side of addressable with many challenges yet to be addressed, and we can only solve them as an industry, as a collective,” says Ashley J. Swartz, CEO of Furious Corp, in her wrap-up of the February 2020 Beet Retreat in San Juan. “It’s not through any one individual large company that we’ll break through to the other side and find a tipping point of growth and acceleration for addressable television and video.”
Consumer privacy is one such challenge, Swartz observes, since more regulation to put guardrails around how sellers leverage data for targeting and delivery of ads is inevitable. The industry needs to coalesce around standards for using data with integrity, without violating the sanctity of consumer relationships.
Ultimately, users need to be put first, and sellers have to prioritize their experience.
“It’s important to come back to that as we evaluate how best to shepherd change toward more audience-based, addressable delivery of premium inventory and formats,” she says.
As they ramp up their addressable businesses, sellers also have to contend with a rising “ad tax” that results from data and technology providers getting a cut of their transactions. This is a long-standing issue within digital media but has only recently become acute for sellers of linear TV. It underscores the importance of developing a marketplace that creates economic value for buyers, sellers and intermediaries alike.
“Currently, the cost of doing business and of serving addressable ads may actually exceed the incremental revenue to be had in the short term,” Swartz says.