Addressability — the ability to deliver TV ads to target individual households rather than more general groups — is the new buzzword in advertising. And a panel session at the Adweek conference in New York yesterday that included speakers from Bloomberg and NBC Universal, as well as several traditional and digital ad agencies, highlighted exactly why addressable advertising has Madison Avenue’s media buyers feeling more than a little conflicted.
In the traditional media-buying paradigm, advertisers buy audiences by buying content. Coca-Cola sponsors American Idol, Nissan sponsors Heroes, and so forth. But social media, ad networks, and especially behavioral ad networks, are chipping away at the “content as a proxy” mentality and positing that ads can be as or more effective if they’re tied directly to people and not to content.
Advertising Age‘s celebrity columnist Bob Garfield spent half the front page of the September 15 issue and three full pages to preach the message: leverage user data to deliver more targeted ads, content and recommendations.
The cable industry has plugged over $150 million into it. David Verklin defected from CEO post at agency conglomerate Aegis Americas this summer to head up Canoe Ventures, which aims to make cable advertising more addressable by leveraging cooperative data from six major cable operators.
Major publishers are investing in it. At the Adweek session, NBC Universal’s senior VP of Digital Media, Peter Naylor, detailed how NBC executed a data-collection effort with multiple vendors during the Beijing Olympics broadcast to better understand usage between TV and NBCOlympics.com, with the end goal of delivering tailored ads and content to its users. On NBCOlympics.com, they tracked real-time stats at affinities between content and demographics. For example, Asians preferred table tennis and diving, the 65+ crowd preferred sailing and boxing. That kind of information can equip sales teams to package up inventory to a more targeted list of advertisers, or conversely, to provide advertisers more targeted audience segments via segmented content.
I’ve covered this topic here for VentureBeat in the past. But for all the talk it’s garnering, media buyers remain hesitant about jumping on the addressability band-wagon for several reasons.
First, while agencies are opening up to a more data-centric approach, operational challenges abound. One of the key issues is that it’s easier to buy a national TV ad than to set up and constantly manage a million-word AdSense campaign, or develop video creative for hundreds of demographics instead of one broad demographic.
Adweek speaker Lee Doyle of MediaEdge:cia explained, “It’s a major change for clients. A completely different way of thinking about advertising and marketing. It takes education, and it changes messaging development all the way through [to buying media]….It’s fifty percent of our conversation [with clients] and ten percent of their budget.”
Further, advertisers are struggling with the sheer volume and sophistication of data available to them. As digital marketing agency Avenue A‘s Andy Fisher said, “We’re drowning in data.” And Michael Vinson of Starcom MediaVest Group, also speaking at the Adweek event, agreed and said the industry needs more quantitative talent.
Perhaps more pointedly, when an audience member asked Doyle if advertising industry leaders shouldn’t be doing more to grow the digital medium by supporting digital content creators and publishers, Doyle quickly underscored that the agency’s role is to buy media as cheaply and efficiently as possible, regardless of the medium.
My interpretation: We can talk all day about how wonderful digital media is, how addressable and trackable and cheap the media is, but the reality is that there’s a decades-long and multi-billion-dollar symbiosis between the ad industry and the TV industry. It’s going to take more than superior product, logic and efficiency to supplant that relationship. And startups like Quantcast, VideoEgg and Vibrant Media are focusing on evolving and supporting that existing relationship as opposed to trying to cut old media out of the equation.