Advanced Television

Addressable advertising to drive TV ad-spend

April 4, 2016

Technavio’s latest TV ad spending market in the US report highlights three key emerging trends predicted to impact market growth through 2019. Technavio defines an emerging trend as something that has potential for significant impact on the market and contributes to its growth or decline.

Technavio identifies three key emerging trends predicted to impact the TV ad spending market in the US through 2019.

“Addressable TV advertising is gaining immense popularity in the US. It is helping advertisers reach out to their target audiences and generating great results in terms of ROI. Within a common programme or navigation screen, this technique is capable of serving different ads or ad pods. These ads are targeted by demography, customer behaviour, geography centric, or through a self-selected individual household method. These ads are delivered through satellite, cable, Internet protocol TV, or set-top boxes,” said Soumya Mutsuddi, one of Technavio’s lead industry analysts for publishing and advertising research.

“The TV ad spending market is going to immensely benefit from sports and political events during the forecast period. The upcoming 2016 Rio Olympics, European Leagues, FIFA World Cup, and the US presidential election are some key events that are likely to increase TV ad spending during the forecast period,” added Soumya.

Technavio’s market research study identifies the following three emerging trends expected to propel the growth of the TV ad spending market in the US:

* Data and audience-driven TV advertising
* Popularity of programmatic advertising
* Real-time bidding

Data and audience-driven TV advertising

The TV advertising industry is gradually shifting its focus from traditional mass targeting to specific data and audience-driven TV advertising. As of 2015, advertisers on TV can buy ad space in a similar way to ads that are sold online. This attracts more advertisers to showcase their products through TV, especially those with limited budgets. This new technology is expected to help advertisers optimize their online advertising strategies. This technology is already being adopted by DIRECTV, Cablevision, and Dish Network. Although in its nascent stage, it is expected to gain significant momentum during the forecast period.

Popularity of programmatic advertising

Programmatic advertising refers to automated buying and selling of digital advertising based on some parameters. This is an efficient yet time-saving innovation that companies are currently using. Rapid growth in programmatic advertising has caught the interest of advertisers and publishers. With the increase in quality and variety of programmatic inventory, advertisers are allocating more budget for programmatic advertising. The fact that programmatic video is more attractive among other programmatic channels is reflected in the more-than-double spending on this by advertisers in 2014-2015. This trend will adversely affect the growth of the TV ad spending market in the US.

Real-time bidding

Real-time bidding is an emerging trend in the US advertising market. RTB buying has outpaced growth in other digital media platforms such as mobile and social in the past couple of years. The US is the largest market for RTBs because of its developed digital infrastructure. RTB spending is expected to more than triple during the forecast period and account for close to 50 per cent of the US digital ad spending market. RTB enables brand advertisers to reduce advertising costs, model ads according to the target audiences, and provide transparency in delivery of ads.

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