Addressable TV advertising is now a mature and mainstream technology that can lead to dramatic improvements in advertising revenue for broadcasters and operators worldwide.
One of the most important meta-trends in the global broadcast industry in recent years has been the growing impact of addressable TV advertising. This has been driven in the main by three factors.
First, the widescale adoption of Connected TV sets by global audiences; streaming content distribution allows broadcasters and operators to deliver different content at household and even individual levels.
Second, the introduction of powerful new technology capable of analysing data and dividing audiences into different segments.
And thirdly by the fact that it simply works better all round than traditional linear TV ads. Broadcasters and operators can make more money from the same amount of ad slots and can decrease ad loads; viewers respond positively to both fewer ads and that the ones they see are aligned with their interests; and advertisers find that recall of their ads is much higher and their campaigns are more effective.
The adoption of addressable advertising / targeted advertising (the terms are often interchangeable) has helped power the growth of FAST TV channels worldwide, as well as enabling streaming companies to diversify their offering and introduce increasingly successful ad-supported tiers. With new technology and rapid developments being introduced all the time, particularly when it comes to AI, it is now a definite mass market technology.
Here are 5 key trends that we have identified in addressable TV advertising for 2025.
2025: 5 trends that will shape addressable TV advertising
1. From ‘add-on to ‘must-have’
One of the main things we have noticed over the past year is an increased number of user requests for targeted TV advertising. This is transitioning from an add-on component of new or updated streaming services to a must-have, reflecting the enthusiasm for the technology amongst advertisers. Recent survey data shows that 53% of advertisers consider it a vital component of any future campaigns. Furthermore 65% plan to start using addressable in 2025, a +57% lift from 2022. TV services that do not have addressable as part of their offering are leaving an ever-increasing amount of money on the table.
2. An expanding ecosystem
The first wave of targeted advertising deployments we saw was concentrated on either live content or on-demand programming, either SVOD or AVOD. This is now changing to encompass the entire video delivery ecosystem: VOD, Live, and Time-Shift TV (the ability to automatically update ads on library content is especially useful for many broadcasters and operators).
It is also expanding in terms of the types of adverts it delivers as broadcasters and operators look to increased their monetisation opportunities. There is now increasing demand for event-driven ads that occur when the viewer pauses or even resumes watching, as well as linked banners that can be deployed in different areas of the EPG’s screen real estate.
3. The importance of privacy
In the post GDPR era, the precise source of the data that is used to segment audiences is of utmost importance. Only first party data, that which is collected directly from a broadcasters and operators’ customers, can be used. AI can extrapolate an impressive amount from this (see 5, below) and this has also led to a rise in contextual targeting. Companies such as ourselves are at an advantage here as we can legally link across the video ecosystem, for example to TV user preferences data from our Secure Player, all while staying within the law.
Beyond this, broadcasters and operators also have the option to ask viewers to consent to provide more data via loyalty schemes, special offers and more.
What is becoming increasingly important in the face of consumer concerns is how that data is then processed by AIs. This needs to be done in specific ways that do not compromise the integrity of the data or that tie it in to specific users. Data anonymisation tools are important here; for example, while we allow broadcasters and operators and operators to use TV user preferences data, we do not expose the user details to external systems.
4. Shoppable TV and cross-platform ads
New revenue models are emerging as the industry evolves. Shoppable TV, for instance, combines e-commerce with video content, enabling viewers to purchase items appearing on screen either with a clickable banner in the UI on the TV or on a secondary screen via a QR code, for example. This provides a measurable boost to the efficacy of product placement in programming.
There is also an increasing demand for genuinely cross-platform campaigns that activate across television, social media, billboards and more. In these cases, the goal is to track as much data as possible, aggregating user response from the different platforms where applicable to provide augmented insight into user behaviour. Advertisers like the effectiveness of this approach and the ability of television to fit into these workflows is becoming increasingly important
5. The impact of AI
AI has had a significant impact at all points of the ad tech stack. We have already been using it for several years to segment audiences, taking the limited amount of data allowable under first party data legislation and using it to provide an impressive level of insight into such metrics as household competition.
The list of the improvements it is bringing to the industry is a long one, but some of the highlights include:
- Better targeting through more advanced AI-driven segmentation
- Versioning and localisation of ad content
- Automatic determination of the most effective ad placements
- Improved data analysis for evaluating ad efficiency
- Increased efficiencies in inventory management between advertisers and publishers
The 2025 opportunity
Developments in addressable TV advertising are taking place at an accelerating speed. The technology is moving rapidly and becoming more capable with every iteration, and those iterations are coming increasingly fast (luckily, as most of the technology is software-based, there are no hardware lock-ins to impede progress).
At the same time, a critical mass has been reached, with the result that it is being specified as part of every new system and/or system upgrade we are seeing. Those broadcasters and operators that are looking to upgrade their systems or roll out new ones are therefore already part of the expanding wave of targeted advertising that looks set to dominate the television ecosystem for the foreseeable future.
Perhaps the key message here is that those who currently aren’t part of this wave should be. Broadcasters and operators without addressable TV advertising need to be looking to implement it in their own businesses as soon as possible.
tl;dr
- The transition from targeted TV advertising as an add-on to a necessity reflects growing advertiser enthusiasm, with 53% considering it vital and 65% planning to implement it in 2025, marking a significant increase from previous years.
- The targeted advertising landscape is evolving to include the entire video delivery ecosystem, incorporating VOD, live content, and Time-Shift TV, while also expanding the types of ads delivered, such as event-driven ads and linked banners.
- In a post-GDPR environment, the focus is on the use of first-party data for audience segmentation, with AI playing a crucial role in legally linking data across the video ecosystem while maintaining user anonymity and privacy.
- New revenue models are being developed, such as shoppable TV that merges e-commerce with video content, and increasing demand for cross-platform advertising campaigns to track user interactions across various media platforms for enhanced insights.
