Addressability (reaching specific members of a broader audience) is improving, but it’s not yet in the place most marketers want it to be. Here’s what’s likely to happen with addressability during 2018, and beyond:
Addressability within platforms
Many people have learned about addressability and reach from the success of the ‘walled gardens’ – platforms like Facebook, Google, Twitter, Amazon, and Snapchat. These platforms use their proprietary data authentication sets to nurture their addressable affluence, and have the rest of the marketing ecosystem struggling to catch up.
Those walled gardens are unlikely to open up in 2018. They have no motivation to do so. Facebook in particular has a very compelling business model: it knows its users, and has no need to share its authentication data in a way that would dilute its competitive advantage. If you control an identity graph as strong and persistent as Facebook or Google’s, your only goal vis-à-vis addressability is to deepen and extend your territorial dominance over what is already the vast majority of digital advertising spend.
There are signs that the dominance of the walled gardens may be reaching its apotheosis. It’s not just marketers like P&G that have grown wary of the leverage these players hold over the ecosystem – their influence over public discourse has begun to draw serious regulatory scrutiny.
But perhaps the most significant threat to the duopoly comes not in the form of a regulator or strident criticism from big brands like P&G. Rather, it comes from the maturation of addressable offerings from players outside the walled gardens.
Addressability within display
After years of rapid innovation and industry consolidation, marketers finally have a more diverse set of options for reaching addressable audiences. There are multiple offerings that now approximate, or even surpass, the scale of addressable audiences that Facebook was once way out ahead in providing. So, 2018 will show some of the ways in which the rest of the ecosystem is evolving – and becoming more competitive.
Others can now connect audiences with cookies, mobile IDs, device IDs, and hashed email addresses. Some key players in the industry are creating standards for deterministic and probabilistic ID matching that could help everyone. The IdentityLink consortium spearheaded by LiveRamp, for example, in which publishers use a common backend identifier to enable authentication across multiple publisher sites, can give everyone better authentication and addressability.
These solutions will attract marketers in 2018 because they don’t come with nearly the same tradeoffs as walled gardens. Namely, whereas the addressability offered within walled gardens is constrained to the platforms themselves, the new open-stack alternatives offer the promise of addressable audiences that can be owned on the brand side – a portable asset that can be leveraged across formats and channels.Addressability within Broadcast
The same pressures ad buyers brought to bear online apply in broadcast, as well, even though spend on programmatic TV remains a relatively low proportion of total TV ad expenditures. Many media sellers want to keep doing what’s already working. And they worry, correctly, that programmatic buying will undermine their stable profits. But worry won’t hold back this tide. Brands want more conversions and improved ROI – and addressable technology will bring both.
In the digital space, marketers have catalysed increasing cross-channel capabilities. As TV viewers use new devices and platforms to watch what happens live, addressable TV will require the same cross-channel mindset to reach households effectively.
TV doesn’t need to undergo a revolution before it adds digital buying approaches to the old approach of looking for shows that index well to the target demographic. In the year ahead, more and more marketers will use offline data and predictive modeling to calculate a score that represents an individual user’s likelihood to convert for a specific brand, just as they do online.
SlingTV offered real-time buying during last year’s NCAA basketball tournament; and Google appears to be using its DoubleClick expertise to serve TV-based ads in the same fashion that it serves video ads online: via real-time bidding and people-based targeting. As more and more brands demand better ROI, lower CPAs, and better conversions, the connected-TV needle will really start to move.
Forward-thinking media buyers will roll with these changes, challenging those who resist.
Originally published 1/24/2018 in ExchangeWire