“Addressable” is a widely used buzzword in video, but it’s important to align on its definition. At a basic level, the term means the ability to target households or individuals. (That makes internet-connected channels like OTT inherently addressable.) Generally though, when you hear addressable TV come up in a conversation, it’s in reference to the ability to target households or individuals in the traditional linear TV space – which has historically been limited to broad filters such as designated market areas (DMAs).
There is a massive opportunity to apply digital technologies and audience data to make broadcast ads targetable and more relevant. The category is finally taking off, and eMarketer projections show that addressable TV ad spend will reach nearly $3.5 billion by 2021, up f rom $2 billion in 2019
Why programmatic can power linear addressable at scale
Programmatic plays an important role in identifying target audiences and creating reach and frequency through addressable opportunities at scale. It allows advertisers to value individual impressions differently in real time through first- and third-party data sets, driving efficiency for advertisers and increased revenue for media owners. A big challenge for addressable TV has been fragmentation, as each new platform or pilot opportunity covers only a subset of the market. Stitching together different types of addressable inventory from varying environments and programmers into one programmatic marketplace means buyers can transact just as they would with OTT inventory, seamlessly adding addressable inventory to their TV buys.
With more inventory available, and the programmatic pipes built out, expect to see more linear TV budgets transacted digitally. For programmers, this means tapping into the growing pool of programmatic TV spend that is expected to reach $6.69 billion by 2021, up from $2.77 billion in 2019.