Talk about missing the point

22 February 2012 | Blog

Even though targeted TV advertising has long been talked about as the holy grail of TV advertising, Deloitte’s report “Targeted Television Advertisements Miss the Point” is correct in pointing out that it is far from commonplace today. However, the reasons cited show a lack of understanding as to why targeted TV advertising has yet to have the impact that is expected. It also fails to recognize that advertisers still clamor for more targeted TV advertising (or why they do so), and does not address what needs to change to drive adoption and usage.

TV is indeed a mass-market medium. It remains the most efficient way to deliver a message to as many people as easily and cheaply as possible. As such, the premise that targeted TV advertising’s value is in its ability to “mitigate the inherent inefficiency of TV ads” by “only showing an ad to an audience that is most likely to be receptive” goes against the core value proposition of TV advertising—its ability to efficiently reach broad audiences. The real value of targeted TV advertising is in the opportunity to continue to efficiently buy broad audiences but target different, relevant ads to specific consumer segments within that audience.  In doing so, key target segments can be exposed to ads that are more likely to resonate with them, which in turn enhances the effectiveness of TV advertising.

The Deloitte report suggests that one of the obstacles for targeted TV advertising is that the high cost of TV ad production makes it very unlikely to make multiple versions for a single campaign. While it certainly true that TV ads can be expensive to produce, the relative investment in production pales in comparison to the related TV ad media investments. As such, it makes economic sense to develop multiple executions or customize TV ads to feature different messages, or feature relevant support points, products, offers and/or calls to action. And Deloitte assumes that every ad variation must be developed in a vacuum, with no overlap in expenses. Today’s customization technology makes it easier than ever to mix and match creative, voiceovers, tags, and more to efficiently produce dozens or even hundreds of variations from a few key components. This is particularly true for promotion-oriented campaigns such as sales events.

Another challenge that Deloitte highlights is that data-driven TV ad targeting requires working with multiple sets of data, such as matching households to individual purchasing history, or identifying consumers most likely to be interested in particular products or services. Just because TV campaigns have historically relied on simple, broad gender and age based demographic targeting does not mean that using a richer and broader set of data to enhance TV ad targeting represents a considerable challenge. Relevant competencies with data-driven targeting are plentiful among marketers and agencies experienced with direct and/or digital marketing.

Deloitte claims that “it should be noted that in many markets advertisers do not pay for “wastage” (reached viewers who are not the core target for the campaign).” This may be true in digital advertising, but is significantly less common in television. Digital does boast many advantages. But the huge (and increasing) viewership for TV is still too big to be ignored, and the continued popularity of TV as an advertising medium shows that most marketers are aware of this. Deloitte also claims that ads are targeted at individuals and defines “waste” as anyone else in the household who wasn’t specifically targeted. They then dismiss their own argument in a bout of circular reasoning by declaring that since multiple people in a household may influence a decision, the whole household seeing an ad is not wasteful at all. Setting aside their straw man, the advantage of targeted TV advertising is not so much the elimination of waste as the opportunity to forge a connection with a household. The exact scenario they cite—an entire household seeing a commercial that is relevant to their family’s buying habits—is ideal.

The Deloitte report fails to mention that major advertisers continue to say that they want to take advantage of targeted TV advertising has to offer, and many have begun or are planning on doing related trials. Earlier this year, Forrester Research reported on a study among members of the Association of National Advertisers (ANA) that found that 73% of the surveyed ANA members expressed interest in targeted TV advertising, and that 47% had already begun experimenting or had plans to experiment with targeted TV ads within 12 months.

Deloitte talks about targeted TV advertising as if it remains hypothetical, ignoring the fact that it’s already happening today. Here at Visible World, we have already executed more than 15,000 targeted TV ad campaigns on behalf of some 300 advertisers, with ads targeted at least 10 times below the market (DMA) level. And even though the reach of our household addressable TV advertising capabilities presently reach only 3 million Cablevision subscriber households, we have already enabled the delivery of more than 2.2 billion household addressable TV ad impressions.

From our perspective, the single biggest issue holding back greater deployment of addressable TV advertising is not technology—it is misplaced focus on using targeted TV advertising to drive greater media efficiency at the expense of the real opportunity to make TV advertising more effective than ever. Rather than using it to carve out niche audiences, targeted TV advertising can continue to leverage the efficient reach of broad audiences but make TV media investments work harder by targeting relevant ads to specific consumer segments. In short, targeted TV advertising needs to combine the efficiency of reaching broad audiences with the effectiveness of being more relevant to specific consumer segments. And in doing so, greatly improve TV advertising’s to influence people’s interests and purchases.