Fear of Efficiency

25 November 2014 | Blog

BoomerangOne of the promises of both addressability and audience-based targeting is an increase in the efficiency of media. When it’s possible to reach exactly the audience a marketer is looking for, it’s no longer necessary to buy broadly in the hopes that your audience is in there somewhere. This promise has made many inventory holders naturally cautious about fully embracing the new technologies. After all, they think, if a marketer doesn’t need as much inventory to reach their audience, why would they not then reduce their TV spend?

This is not the most productive way to look at the situation, however. While in a marketer’s ideal world, of course, they would always buy exactly the inventory they needed in every possible medium, few marketers have that kind of freedom. Instead, most have a constrained budget to spend across a number of media. They have to make their media mix decisions taking all the relative efficiencies and constraints into account. Almost no marketer will ever have the budget she wishes for.

So what happens when you increase the efficiency of TV inventory? The marketer can reach her target audience with less overall inventory, leaving her with a little more money than she would have otherwise had. But remember, TV is now more effective at reaching her target audience. Not only that, with the enhanced metrics that come along with programmatic and addressable TV, she now has more visibility into that effectiveness. What’s a smart marketer going to do? Take that extra money and buy more of that extremely efficient, effective inventory!

People will spend more into something that’s working. When we make TV work better for marketers, it encourages them to spend more money on TV. Why put that money elsewhere when the most efficient tactic is to just plow it back into TV?