A Guide To Precise TV Targeting - Video Advertising Bureau

“Knowledge”.............................................................................. 17-29 Addressable Example..................................................................18 Workflow.......................................................................................19 Data................................................................................................ 20 “First Party Data” ROI Case Study............................................. 21 Data Provider Capabilities..........................................................22 “Third Party Data” ROI Case Study...........................................23 Targeting........................................................................................24 “Category Usage” ROI Case Study...........................................25 “Look-Alike Customers” ROI Case Study............................... 26 Impressions Distribution Example............................................27 “Tune-In” ROI Case Study......................................................... 28

Contents

Post-Buy Analyses...................................................................... 29 “Scale”.........................................................................................30-36 Map................................................................................................. 31 Penetration Comparison............................................................32 “Time Spent” Comparison..........................................................33

Summary............................................................................................ 3

Audience Comparison............................................................... 34

Scale of Television........................................................................ 4-7

“Scale” ROI Case Study...............................................................35

TV Reach..........................................................................................5

Projected Growth....................................................................... 36

TV “Time Spent” vs. Major Ad-Tech Platforms.........................6

“Strategic Alignment”..............................................................37-40

TV vs. Digital Video Ad Spend..................................................... 7

Categories.................................................................................... 38

Addressable TV Overview......................................................... 8-15

Advertiser Types.......................................................................... 39

Definition.........................................................................................9

“Target Overlay” ROI Case Study............................................. 40

Penetration & Providers..............................................................10

“Transparency”.......................................................................... 41-52

Ad Spending.................................................................................. 11

Programming.........................................................................42-44

Benefits.......................................................................................... 12

Digital Ad-Tech Comparison..............................................45-48

Additional Highlights................................................................... 13

Estimated Cost Comparison..............................................49-50

Cross-Platform Opportunities..................................................14

Spending By Media Type............................................................ 51

Cross-Screen ROI Case Study................................................... 15

Summary........................................................................................52

Perceived Barriers.......................................................................... 16

Contact Us ...................................................................................... 53

SUMMARY

Summary • Television remains the largest video platform viewed by consumers and utilized by marketers

• TV delivers more than a 90%+ monthly reach and accounts for 90% of total video spend

• As marketers seek even greater precision for their messaging, there’s a premium on opportunities that can provide the impact and engagement of TV with the targeting of “one-to-one” marketing • Addressable TV, a burgeoning segment in this space, which focuses on household-level targeting, has been gaining steady traction with advertisers on its way to capturing $1 billion in advertising spend by 2018 • While 60% of marketers surveyed are either currently using Addressable TV or planning to use it in the near future, there remains several perceived barriers that may limit the balance of marketers from implementing Addressable TV as part of their media strategy • This report provides an overview of Addressable TV then individually breaks down each perceived barrier – like scale and transparency – with case studies in order to arm marketers with real information on the true merits of this platform

SAY YES TO ADDRESSABILITY:

A GUIDE TO PRECISE TV TARGETING

3

Speaking Of Scale… Television Remains The Largest Video Platform Viewed By Consumers And Utilized By Marketers

TV REACH

Television Delivers Massive Reach Across All Demos Live + DVR/Time-shifted TV “Monthly Reach” 2Q ‘16

% 92

% 92

K2-11

T12-17

% 85

A18-24

% 89

A25-34

% 94

A35-49

% 96

A50-64

% 93

P2+

% 93

P18+

Source: Nielsen Total Audience Report, 2Q’16. Table 3A – Percentage Of Users (Monthly Reach) Among US Population For 2Q’16



5

TV “TIME SPENT” VS. MAJOR AD-TECH PLATFORMS

Much More Time Is Spent With Ad-Supported TV Than With The 4 Major Portals & Facebook Combined The major buying demos spend over three hours a day viewing ad-supported TV while the overall population averages four hours per day Ad-Supported TV vs. 4-Portals + Facebook: “Monthly Time Spent” Average minutes per viewer/visitor (hrs:mins) - June ‘16 :56 119

6 9:3 10

:19 92

:28 42

:49 41

P18-49

P25-54

TV Only

:30 32

P2+

4 Portals + Facebook

Source: Nielsen Npower Live+7 June 2016, VAB analysis of comScore duplicated June 2016 data (mediametrix, multiplatform). Ad-Supported Television Brands represents all measured Ad-Supported Cable nets, Broadcast Television and MVPDs. 4 portals = Google (includes YouTube), AOL, MSN, Yahoo!



6

TV VS. DIGITAL VIDEO AD SPEND

Although Digital Video Is Showing Steady Annual Growth, Marketers Continue To Spend Largely On TV Total TV vs. Digital Video Advertising Revenue Projections

$65.2 $67.3

$69.8

$67.7

$72.4

$64.2 $64.2 $58.3

$59.3

$1.4

$1.9

2010

$2.4

2011

2012

$3.0

$4.4

$6.0

2013

2014

2015

Digital Video

$7.8

$9.1

2016

2017

$10.8

2018

Total TV

Source: Pivotal Research U.S. Media Forecast, June 2016; Total TV includes national & local TV, digital video excludes long-form content



7

In Their Quest For Even Greater Precision, Many Marketers Are Looking For The Impact & Engagement Of TV With The Targeting Ability of “One-to-One” Marketing

DEFINITION

Addressable TV’s Precision Targeting Delivers Unrivaled Relevancy For Advertisers What Is Addressable TV? The ability of an advertiser to deliver household-level TV advertising via the set-top box based on a defined audience target developed through first-, second-, and/or third-party data. Under this method, the advertiser buys the audience and not specific networks or programs. Addressable TV is a means of delivering the right ad to the right person by combining the unmatched reach of television with the targeting precision and measurement capabilities of “one-to-one” marketing.

For the purposes of this report, “Addressable TV” refers only to the multichannel video programming distributor (MVPD) offering / platform



9

PENETRATION & PROVIDERS

Almost 50 Million U.S. Households Have Addressable TV Capabilities •A s of mid-2016, there are 49.8MM addressable TV HHs across the U.S., representing more than 42% of TV HHs

AT&T / DIRECTTV

DISH

Altice

Addressable TV

Comcast

Charter*

*VOD / TV Everywhere app only

Source: Starcom MediaVest Group, May 17th 2016. Note: total Addressable TV households in 2016 = 49.8MM. Charter reflects Time Warner Cable; Altice reflects Cablevision.



10

AD SPENDING

By The End of 2016, Addressable Will Grow To Nearly A $1 Billion Segment Of TV Advertising Addressable TV is projected to grow 443% over a three year period U.S. Addressable TV Ad Spending Projections 2015 – 2018 (in millions) 0.0 ,17 2 $

0.0 56 , 1 $

.0 90 $8 .0 00 $4 2015

2016

2017

2018

Source: eMarketer, June 2016. Note: targeted TV ads delivered on a home-by-home basis via cable and satellite boxes; includes VOD; excludes connected TV, smart TV and OTT



11

BENEFITS

Right Ads Reaching The Right People: The Benefits of Addressable TV Marketer’s Perceived Benefits of Addressable TV

Major benefits of Addressable TV: Precision Goes beyond the traditional Nielsen demographics of age and sex to develop more precise targets based on granular demographics, geography, transactional / consumption & behavioral activities Customized Creative / Tracking Ability to develop creative for different target segments then learn which HHs respond to which message in order to craft future messages in a more personal & relevant way Relevancy Reduction of non-targeted ad impressions by eliminating ads seen by viewers who are unlikely to take action on an advertiser’s product or service while also allowing advertisers to frequency cap to avoid message wear-out ROI Measurement & Testing In-depth post-campaign reporting with attribution tracking through media providers and third-party data partners

72%

More Precise Targeting

Customized Creative for Various Target Segments

42%

36%

No Wasted Impressions

Impression-Based Buy

27%

More Accountable With True ROI

25%

Source: Based on a survey of media buyers and product marketers conducted by Adweek Brandshare on behalf of AT&T AdWorks in February and March 2016. All 158 respondents had oversight of or involvement in purchasing advertising or media or were involved in marketing a specific product or service. All respondents were located in the U.S.



12

ADDITIONAL HIGHLIGHTS

A Few Additional Highlights On Addressable TV Addressable TV is… • Available

through a multichannel video programming distributor (MVPD) platform

•A n

ad that’s delivered only to households when the television is on and only to the audience that satisfies the advertiser’s target criteria

•P remium

inventory where the linear Addressable is allocated from the approximately two minutes of local advertising time an hour that is made available by each insertable cable network to the cable or satellite operator

• Addressable

ads can also be inserted in Video-On-Demand (VOD) as pre-roll, mid-roll or post-roll

•B ased

on buying audiences, not networks or programs…therefore viewers don’t find the ads, the ads find the viewer. The ad targets a specific audience regardless of what they’re watching instead of projecting upfront what programs they’ll be watching

• Impressions • Fully

/ audience-based vs. GRPs / ratings-based

transparent in reporting, measurement and back-end reporting



13

CROSS-PLATFORM OPPORTUNITIES

Addressable TV Can Extend Across The Television With Additional Cross-Platform Opportunities On Mobile •O ver

two-thirds of marketers would like to extend their Addressable targeting capabilities across screens Strongly Agree I would like to extend Addressable TV targeting across different devices and platforms

23%

Agree

45%

68%

•T V

providers can build additional scale and elevate engagement by connecting the same consumers with an advertiser’s message both on their TV at home and on their phone while on the go •B ecause

it’s authenticated data, providers don’t have to use cookies or proxies to determine who someone is on the mobile device

•A dvertisers

can offer complementary messaging between devices while optimizing their advertising within the mobile experience by offering features like mobile coupons, location-based messaging or the ability to click-to-purchase

Cross-platform addressability truly can deliver the right ad to the right person at the right moment Source: Based on a survey of media buyers and product marketers conducted by Adweek Brandshare on behalf of AT&T AdWorks in February and March 2016. All 158 respondents had oversight of or involvement in purchasing advertising or media or were involved in marketing a specific product or service. All respondents were located in the U.S.



14

CROSS-SCREEN ROI CASE STUDY

Cross-Screen Addressable ROI Case Study:

AT&T Mobile Saw A 27% Lift In Sales When Consumers Saw An Ad On Both Their TV & Mobile Screen Mobile Telecommunications Category Brand (AT&T Mobility)

+18.9% vs. control

Target:

BUY RATE

Reach DIRECTV homes who are not AT&T Wireless customers

Flight Duration: 3 weeks

0% 34 2 . 0

% 82 7 2 0.

+26.8% vs. control

% 66 9 2 0.

Exposure Groups: Control Group: HHs not exposed to Addressable TV or Mobile Ad TV Group: Target with TV Ad Exposure

Control

TV & Mobile Group: Target with TV and Mobile Ad Exposure

Target: TV

Target: TV and Mobile

• Those exposed to the Addressable TV ad saw an +18.9% lift vs. the control group • There was an additional lift in sales to +26.8% when a consumer received an Addressable ad on both their TV and mobile screens vs. the control group

Campaign flight: Q4 2015. Case study results are based on individual campaign factors. AT&T makes no performance warranties. Control: Represents 10% of DTV HHs within the target that did not receive exposure to the Addressable ad Source: AT&T Internal Data and Opera Mediaworks



15

PERCEIVED BARRIERS

Although Nearly 60% Of Brand Marketers Are Either Using Or Plan To Use Addressable TV In The Next Year, There Are Still Some Perceived Barriers That Exist For Others: Knowledge / Understanding Scale Strategic Alignment Transparency




16

Breaking Down The “Knowledge” Barrier

EXAMPLE

With Addressable TV You Can Reach The Right Audience At The Household Level As an example, imagine a street in San Francisco all tuned into a 49ers game on ESPN’s Monday Night Football through their local cable or satellite provider… …the program content is all the same, but the local commercials can be tailored to each household’s specific consumption patterns and behavioral data



18

WORKFLOW

How Addressable TV Works Addressable TV is not as complex as you might think; sophistication doesn’t have to mean difficult

Data Providers 5

BRAND

Nielsen Catalina CPG

Kantar Shopcom CPG

3

Target Households 4

Polk (IHS) Auto

Experian

Brand Data

Analyze

various

Acxiom various

Crossix

Healthcare

IXI Services Finance

Results: • Brand Lift • Consideration • Response • Conversion • Sales Lift • ROI • Frequency / Creative Impact

Mastercard Retail

Media Partner Viewership Data

3• Based on the matching data, the data provider / media partner finds the specific households the brand

wants to reach. Then they pinpoint and identify those households within the Addressable TV footprint. 1• Brand works with media partner on the objectives of campaign and 4• The brand’s ad is delivered only to the households in the target segment with zero waste.

provides relevant first-party data if available. 2• The brand information is matched with the relevant third-party data

provider who offers anonymized in-depth, vertical-specific knowledge in a privacy compliant manner.

5• After the Addressable campaign is complete, the media partner / data provider analyzes the results

of the campaign and provides the brand with post-buy media details and insights such as impact on brand awareness, purchase consideration and even sales conversion.

Source: AT&T “Addressable Television Best Practices”; Experian Addressable TV Whitepaper, 2015



19

DATA

An Addressable Advertiser Can Mine Data From Different Sources To Determine Their Target Audience A precise, desired audience can be developed through first-, second- or third party data

First Party Data

Second Party Data

Third Party Data

Advertiser’s data about its own customers, prospects and website users

Data elements from partners or affiliates that a brand works with

Data ad advertiser acquires from other companies such as Experian or Axciom

Potentially made up of purchase history, registered profiles, email subscribers Can be completed and enriched by third party data

Advertiser may share a customer who they would like to co-market to Example: credit card company wants to target individuals who frequently travel on a specific airline

Important to vet that third party data has both scale and accuracy Can be used on its own, or with first and second party data to enrich targeting and segmentation

Third-party data is particularly useful for prospecting campaigns and can help “fill in the holes” of a marketer’s own customer database to build meaningful scale Source: Internal VAB information and Experian Addressable TV Whitepaper, 2015



20

“FIRST PARTY DATA” ROI CASE STUDY

“First Party Data” Addressable ROI Case Study: A Financial Brand Increased Ad Awareness Among Both Customers & Prospects By Double-Digits Leading To A 142% Lift In Higher-End Account Opens Financial Category Brand

+51% Lift

+142.1% Lift +39% Lift

% 62

41%

+38.3% Lift

57%

Control

9 ,14 $24

79% 0.6

41%

Target

91% 0.4 974 $9,

Aided Ad Awareness Lift: Customers

Aided Ad Awareness Lift: Prospects

Account Opens

Size of Accounts: Median Assets

Target: Current customers or prospective customers

Target: Current customers using Client’s CRM data



Campaign flight: Q4 2014. Case study results are based on individual campaign factors. AT&T makes no performance warranties. Control: Represents 10% of DTV HHs within the target that did not receive exposure to the Addressable ad Source: iXi for targeting and backend results. Penn Schoen Berland for the Brand Health Study.



80

21

DATA PROVIDER CAPABILITIES

Capabilities of Some of The Industry’s Major Data Providers Across Top Verticals Some providers are “generalist” providers covering several categories, like Experian and Acxiom, while others are “specialists” focusing on one or two specific industries Industry Data Providers: Targeting and Measurement Capabilities Provider

Demos

Digital

Auto

84.51⁰

CPG

Finance

Insurance

Healthcare

Retail

Travel

QSR

✔

Acxiom

✔

✔

✔

✔

✔

✔

✔

✔

comScore / Rentrak

✔

✔

✔

✔

✔

✔

✔

✔

Crossix

✔

Datalab USA

✔

✔

✔

Epsilon

✔

✔

✔

✔

✔

Equifax (IXI)

✔

✔

✔

✔

✔

Experian

✔

✔

✔

✔ ✔

Kantar Shopcom Mastercard Advisors

✔ ✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔

Medix

✔

Millward Brown Neustar

✔

✔

✔

✔

✔

✔

✔

✔

Nielsen Catalina Solutions Data example: Registration data, dealer loyalty data, purchase predictor

Placed

✔

✔ ✔

Polk

Speedeon

✔

✔

✔

✔

✔

✔

✔

✔

✔

✔ ✔

✔

Chart based on information aggregated from internal VAB data and Dish’s “The Addressable TV Topping Point” Whitepaper



22

“THIRD PARTY DATA” ROI CASE STUDY

“Third Party Data” Addressable ROI Case Study: An Automotive Brand Saw Double-Digit Lifts In Their Metrics Across The Purchasing Funnel Automotive Category (Asian Compact) Brand +46% Lift +15% Lift

+10% Lift

31%

32%

41%

Target: Custom Acxiom model

% 28

% 29

27%

Control Target


Brand Awareness

Ad Recall

Purchase Intent

• Viewers exposed to the Addressable ad saw a greater lift vs. the control in brand awareness, ad recall, and purchase intent • One-third of DIRECTV customers would take action after seeing the ad, such as making a purchase, visiting the website, discussing the brand with others, and more • The Addressable campaign improved brand perception among test subscribers across all measured metrics including fuel efficiency, quality, value, safety, design, and style Campaign flight: Q1 2016. Case study results are based on individual campaign factors. AT&T makes no performance warranties. Control: Represents 10% of DTV HHs within the target that did not receive exposure to the Addressable ad Source: Acxiom for the targeting. Penn Schoen Berland for the Brand Health Study.

80


70 A GUIDE TO PRECISE TV TARGETING

23

TARGETING

Addressable TV Allows Both Hyper-Granular & BroadBased Targeting While Still Reaching A Precise Audience Targeting examples of going beyond age/sex demographics to hit likely purchasing segments

Dog Owners

In-Market for a Luxury SUV Import

Peanut Butter Purchasers

Specific Store’s Rewards Member

Tea Drinkers

Motorcycle Owners

High Credit Score Holders

Previous Buyer of a Competitor Brand

Likely Hybrid Car Purchasers

Loyal Hotel Brand Customer

Previous Buyer of a Specific Brand

Regularly Dine Out

Prospects For Life Insurance

Regular Buyer of Potato Chips

Avid News Channel Viewer

Recent Homeowners

Registered Democrats

People That Like to Watch Horror Films

Recent Cruise Takers

Frequent Flier Club Members

Soon-to-be Retirees

Geo-targeted HHs with kids under 6

Contact Lens Wearers

Beer Drinkers

Insurance Company’s CRM List



24

“CATEGORY USAGE” ROI CASE STUDY

“Category Usage” Addressable ROI Case Study: Purina Beyond Brand Sales Increased 72% Among The Exposed Households CPG Brand – Total Purina Beyond Dollar Trend Target: Pet Owners

Flight Duration: Addressable VOD

Exposure Groups: 5 weeks (12/1/14 – 1/4/15)

Source: Comcast Media 360, Addressable TV ROI Analytics / Nielsen Catalina Solutions



25

“LOOK-ALIKE CUSTOMERS” ROI CASE STUDY

“Look-Alike Customers” Addressable ROI Case Study: Using Modeling Of An Advertiser’s Rewards Customers, A Travel Brand Saw Significant Increases In Trips To Three Key Destinations Travel / Tourism Category Brand

+117.2% Lift

Target: • Custom list • Look-alike model of the advertiser’s rewards customers

+38.9% Lift

+29.7% Lift

2% 3.3

0% 3.1

9% 5.1

9% 2.3

9% 2.3

9% 2.3

Flight Duration:

Control Target

2 Months

Buy Rate: Florida & Atlanta

Buy Rate: North & South Carolina

Buy Rate: Texas

*Buy Rates are based on a subset of the target HHs for which the media partner got return path data

Campaign flight: Q2 2014. Case study results are based on individual campaign factors. AT&T makes no performance warranties. Control: Represents 10% of DTV HHs within the target that did not receive exposure to the Addressable ad Source: Experian



80 70

26

IMPRESSIONS DISTRIBUTION EXAMPLE

Household-Targeting Has The Ability to Reach All Kinds Of TV Viewers, Light & Heavy Ones Alike The ad finds the viewer vs. having the viewer come to the ad • Using frequency capping and thresholds, Addressable TV can limit the impressions against the heaviest viewers to improve overall reach % of Addressable IMPs Campaign Average Example

.4% 12

6% 11.

2

1

(Heaviest Viewing)

4% 11.

3

1% 11.

4

.7% 10

5

% 9.6

% 9.4

6

7

Viewing Segment by Decile

% 8.3

% 8.2

% 8.0

8

9

10

(Lightest Viewing)

Source: As published in AT&T’s “Addressable Television Best Practices” Whitepaper. Nielsen Npower, First Half 2015, P2+. Addressable Impressions by Decile based on demonstration data; addressable campaign 3Q/4Q 2015 average. Proprietary AT&T information (2016 AT&T Intellectual Property).



27

“TUNE-IN” ROI CASE STUDY

“Tune-in” Addressable ROI Case Study:

A Returning Season 2 Program Saw A 103% Lift In AQH Rating Vs. The Time Slot’s Average During The Previous Two Weeks Advertised program Addressable campaign boosted average quarter hour ratings +103% vs. the time slot’s average rating during the previous two weeks

Segmentation: Audience segmented based on previous program and network tuning. Using STB data to recommend optimal networks to best reach the defined audience segments.

Flight Duration: 1 week

Reporting & Measurement: • W eekly Reporting: contains target impressions and impression delivery by segment and by week • Campaign Report & Affidavit: contains target impressions by segment, week, network, daypart and hour, plus R&F

Source: Altice Media Solutions. Total Audience Data, Tune-In Campaign Flight Dates. Representative of quarter-hour household ratings and total households tuned to program on network for a minimum of five minutes. Private and confidential, Altice Media Solutions.



28

POST-BUY ANALYSES

Post-Buy Analyses Can Provide Critical Learnings To Inform Future Campaigns Post-campaign reporting can provide insights on topics such as the optimal frequency level and amount of time it takes to spur consumer action Post-Buy Analyses Example From An Educational Institution Advertiser

Source: Altice Media Solutions



29

Breaking Down The “Scale” Barrier

MAP

Addressable TV Can Provide Nationwide Coverage Available In All 210 DMAs Across The 50 States

Coverage in All 210 DMAs



31

PENETRATION COMPARISON

At 50MM HHs, Addressable TV Has A Larger Footprint Than Netflix & Other Popular Subscription Platforms How Big Is Addressable TV? (in millions) .8 49

5 47.

7 33.

6 33.

.7 30

.0 30

4 27.

3 13.

Addressable TV HHS

Netflix U.S. subs

Amazon Prime subs

HBO subs

Sirius XM subs

Spotify subs (global)

Amazon Prime Video Users

Hulu U.S. Subs

9.7

Twith Daily Users

1.1 Sling TV subs

ource: VAB analysis of Nielsen data and company reports for Netflix (Sept ‘16), Amazon Video (estimated) and Hulu for 2Q 2016; Amazon Prime subs based on Q4’15 data from SNL Kagan as of March 2016; Sling TV based on mid-September 2016 Nielsen estimates; HBO based on SNL Kagan and company reports June 2016 (includes cable, DBS, Telco & OTT subs); Spotify based on SNL Kagan as of March 2016, SiriusXM and Twitch based on latest available company reports.



32

“TIME SPENT” COMPARISON

Additionally, Time Spent With Ad-Supported Cable TV Is Much Higher Than Any Major Digital Ad-Tech Platform Digital Platforms vs. Ad-Supported Cable TV Average Minutes Per Visitor / Viewer August 2016

21 3,9

60 1,1 6 89 9 64

Ad-Supported Cable TV

Pandora

Facebook

YouTube

8 44

Netflix

6 38

Pokemon Go

1 26

Snapchat

222

Google

6 20

Instagram

185

125

76

75

Yahoo

AOL

Pinterest

Twitter

Note: Digital platforms ranked on “average minutes per visitor” among the top 100 measured web domains Source: comScore, August 2016 MediaMetrix (top web domains, except for Snapchat which was based off of “properties”). Ad-Supported TV based on Nielsen NPower R&F Time Period Report, 8/1/16 – 8/31/16, Live+SD, P2+.



33

AUDIENCE COMPARISON

Furthermore, Addressable TV’s Audience Would Rank In The Top 10 If It Was Considered A Digital Ad-Tech Platform Addressable TV’s audience universe is estimated to be 127.7MM P2+ when projected out across the 50MM household footprint (avg # of people per cable HH x household penetration) 2.9 21

Select Digital Platforms’ Monthly Unique Visitors vs. Estimated Addressable TV Audience (in millions)

3.5 20 0.1 17

7.7 12

YouTube

Facebook

Amazon

Addressable TV

4.9 12

LinkedIn

1.2 12

Instagram

.6 116

Wikipedia

9.8 10

.2 98

Twitter

Pinterest

#11

#12

.6 92

Yelp

.6 85

.0 83

.0 80

.0 74

.9 63

Apple

Pandora

Netflix

Buzzfeed

Snapchat

#20

#23

#26

#30

#46

comScore Rank:

#2

#3

#5

#7*

#8

#9

#10

#16

Note: Digital platforms ranked on “monthly unique visitors” among the top 100 measured web domains *Addressable TV would be ranked #7 from an audience perspective in comScore if it was a measured digital ad-tech platform Source: comScore, August 2016 MediaMetrix (top web domains, except for Snapchat which was based off of “properties”), total unique visitors. Addressable TV’s total audience is estimated based on 49.8MM Addressable HHs multiplied by 2.565 (the ratio of P2+ / HHs in “cable and/or ADS” households from Nielsen 2016-2017 universe estimates).



34

“SCALE” ROI CASE STUDY

“Scale” Addressable ROI Case Study:

A Retailer Saw Double-Digit Sales Increases Across The Spectrum of Targeted Household Incomes Retailers who need to build scale to drive both online and offline traffic & sales rely on Addressable to reach their optimal targets

Retail Category Brand

+64.7% Lift

+50% Lift

+11.5% Lift

% .03

9% .02

Target: Custom Model: Income based

Flight Duration:

8% .02

6% .02

% .02

7% .01

Control Target

1 Month

Buy Rate: $25k-$75k HH Income

Buy Rate: $75k-$149k HH Income

Buy Rate: $150k+ HH Income

*Buy Rates are based on a subset of the target HHs for which the media partner got return path data

Campaign flight: Q3 2014. Case study results are based on individual campaign factors. AT&T makes no performance warranties. Control: Represents 10% of DTV HHs within the target that did not receive exposure to the Addressable ad Source: Acxiom



35

PROJECTED GROWTH

Addressable Will Soon Make Up A Large Majority of Pay-TV HHs As It Continues To Grow Over The Next Five Years Estimated Addressable % Penetration of Pay-TV HHs

% 74

% 64 % 60

% 48

2017

2018

2019

2020

Source: Internal AT&T estimates



36

Breaking Down The “Strategic Alignment” Barrier

CATEGORIES

Advertisers, Both Big And Small, Across A Spectrum Of Major Categories Currently Use Addressable TV Auto

CPG

Finance / Insurance

Healthcare

Retail

Travel

QSR

Tune-In

Political

Movies



38

ADVERTISER TYPES

Addressable TV Works For Various Types Of Advertisers While Having A Separate Utility For Different Brands Who is currently utilizing Addressable TV advertising? • Types: Direct response & brand marketers • Advertisers: anyone from major national brand advertisers to the local “mom & pop” restaurant down the street • Footprint: national, regional, local DMA, hyper-local Whether a direct response or general market advertiser, Addressable TV is about finding the balance of being ultra-targeted while not excluding any “low-hanging fruit” customers

Why are many of these marketers utilizing Addressable TV advertising? • For existing national or local TV advertisers it’s a means of increasing frequency against a core customer beyond their mass television awareness • It’s also an exciting platform that enables marketers, who don’t advertise on TV because of budget constraints or because they lacked an efficient way to reach their niche audience, to get their message on television • Additionally, some existing TV advertisers look to Addressable to promote a specific product line that has historically not received TV support • Example: a large national advertiser in the insurance category ran an Addressable campaign specifically for its renter insurance, a product it had never promoted on TV because the universe of renters was too small to make a mass campaign worth the cost



39

“TARGET OVERLAY” ROI CASE STUDY

“Target Overlay” Addressable ROI Case Study:

Volvo Managed To Breakeven During Its First Month Of A Quarter-Long VOD Campaign As Their Precise Targeting Led To $2.5MM In Incremental Sales Existing national TV advertisers utilize Addressable to increase frequency against their core customers

Target: In the market for a European Luxury Car (Experian Auto)

Flight Duration: 3Q’14

Platform: Addressable VOD DAI

Optimal Ad Frequency: HHs exposed 31-40 times were most likely to purchase a Volvo

Results: • Media Cost: $500K gross • Incremental Sales: $2.5MM • Campaign Net ROI: $2.0MM • Sales: Exposed HHs had 59 incremental Volvo purchases • Breakeven Point: One month

Source: Comcast VOD / Experian Automotive. All New Vehicle Sales, VOD DAI Volvo audience = In Market for European Luxury Car (Experian Auto)



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Breaking Down The “Transparency” Barrier

PROGRAMMING

Addressable TV is Available On Premium Networks… Addressable ads are slotted within the approximately two minutes of local advertising time each hour made available to cable or satellite operators



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PROGRAMMING

…And Within Premium, Iconic Programming For transparency, many post-campaign reports include detailed delivery information like impressions by daypart and network



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PROGRAMMING

When Implementing Addressable, Buying Audiences Across A Wider Range Of Networks Would Further Increase Reach 50% of total time spent with ad-supported cable TV now happens outside of the top 20 nets as new networks have launched and program viewing further fragments • With this “one-to-one” targeting, value can be found in any program on any network

“Total Minutes Viewed” Breakout By Cable TV Network Networks ranked by total minutes viewed

37%

45%

(42 measured nets)

Top 20

(87 measured nets)

Top 20

63% 20%

50%

(71 measured nets)

Top 20

55%

50%

19%

43%

17%

36%

May 2006

33%

May 2016

May 2011

Top 10

Top 11-20

All Other Networks

Source: Nielsen NPower Reach & Frequency Program Report. Live, P18+, Ad-supported cable TV networks only.



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DIGITAL AD-TECH COMPARISON

The Addressable TV Opportunity Is Different Than Many Digital Targeted Buys Because It’s Authenticated & Purely Premium • Since Addressable TV is employed at the household-level against authenticated subscriber data from cable and satellite providers, cookies and other proxies don’t have to be used to determine who someone is, like in many programmatically targeted digital buys • Because Addressable TV is an authenticated audience, there is the capability to rather easily analyze those who were exposed to an ad and see who took action. This additional level of accuracy separates their measurement standards from a lot of what’s done in digital today. • Addressable TV ads run exclusively on premium programming with high production values while many programmatic digital ads could be against little viewed user-generated content or remnant inventory • Addressable TV ads have a universe of about one hundred or so TV networks that they can air on while programmatic digital ads, which also utilizes targeting data, could run on literally thousands of websites with varying degrees of quality or non-quality



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Media Partners & Reputable Data Providers Link TV Addressability Directly To Actual Customer Targets • In a recent study, almost 60% of marketers said they were extremely / very confident that they knew who their best target audience is • Addressable TV exclusively marries transactional & consumer data to media buys while digital ad-tech platforms also offer more “soft” targeting capabilities that align with behaviors such as online interests (which could be dated), who people are connected to, what videos people watch or even which emojis people use

Addressable TV Respected & Reliable Third-Party Data Providers

Digital Ad-Tech First-Party Data Targeting Based on User Activity includes behavioral and interest targeting based on what people are connected to on Facebook; “connections” targeting advertises to people who have friends that are connected to what’s being advertised

Nielsen Catalina – CPG Kantar Shopcom – CPG Polk (IHS) – Auto Experian various

includes “placement” targeting where advertisers can target YouTube channels or websites within their display network; “keyword” targeting is based on words or phrases related to a video, channel or website

Acxiom various

Crossix – Healthcare IXI Services – Finance

includes “follower” targeting to reach people that are following specific accounts; “keyword” targeting is based on what users recently tweeted; “emoji” targeting is based on people who have recently tweeted or engaged with tweets featuring emojis

Mastercard – Retail Media Partner – Viewership Data




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Addressable TV Ads Air During High-Quality Programs While Programmatic Digital Ads Could Easily Also Run Against Questionable Content TV Brands


Ad-Tech Platforms


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Addressability Provides Much Sought After Accountability Without The Digital Ad-Tech Problems Addressable TV offers precise targeting capabilities and data collection without the problems most closely associated with digital ad-tech platforms

Addressable TV

Issue

Digital Ad-Tech

No issue

Bots / Fraud

3% - 37%

Addressable Ads only run when the TV is on

No issue

Viewability

Always an opportunity to see as the ad covers 100% of the screen

average campaign range

Only 45% of ads are viewable based on MRC standard (display: 50% of pixels in view for 1 second) (video: 50% of pixels in view for 2 seconds)

No issue

Ad-Blocking

Always an opportunity to see as ads can’t be blocked on screen

25% of internet users have an ad-blocker installed

Source: bot / fraud data based on the ANA /White Ops 2015 Bot Baseline “Fraud in Digital Advertising” report, January 2016; viewability stats from U.S. Media Quality Report, 4Q’15, Integral Ad Science; internet ad-blocking figure based on the GroupM 2016 Interaction Report, April 2016



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ESTIMATED COST COMPARISON

Addressable TV Is More Efficient Than Digital Ad-Tech Targeting When Bot Fraud & Viewability Issues Are Factored In An example showcasing the comparative efficiency of Addressable TV for a targeted campaign All costs are estimates for the purposes of this analysis Reported Averages

Digital Ad-Tech Video Addressable TV

Est. CPM $12 $30

Total IMPs (000) 833.3 333.3

Budget $10,000

Est. % of Target 100%

Est. Bot Fraud 20%

$10,000

100%

0%

Viewable 45%

Adjusted IMPs (000) 300.0

Est. Adjusted CPM $33

0%

333.3

$30

“Addressable TV” IMPs Efficiency:

11%

A large majority of advertisers are also willing to pay higher CPMs, relative to linear TV, for the precision of addressable TV Strongly Agree I would be willing to pay higher CPMs if I could target more effectively

15%

Agree

56%

71%

Source: Based on a survey of media buyers and product marketers conducted by Adweek Brandshare on behalf of AT&T AdWorks in February and March 2016. All 158 respondents had oversight of or involvement in purchasing advertising or media or were involved in marketing a specific product or service. All respondents were located in the U.S. For the example, bot / fraud data based on the ANA / White Ops 2015 Bot Baseline “Fraud in Digital Advertising” report, January 2016; viewability stats from U.S. Media Quality Report, 4Q’15, integral Ad Science; estimated addressable CPM was based on addressable article in Adweek, 9/26/16. Estimated costs are for illustrative purposes only.



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ESTIMATED COST COMPARISON

Addressability Can Also Deliver Audience Efficiency At A Lower Out-Of-Pocket Cost Than Digital Ad-Tech Targeting • Addressability can provide advertisers who don’t traditionally invest in TV with an affordable opportunity to get their hyper-targeted message on TV, direct to their desired audience only • Many advertisers with limited budgets avoid TV because they can’t justify paying for impressions that won’t exclusively reach their target audience…that’s not a problem with addressable TV

• Furthermore, as the below example shows, an advertiser can theoretically reach the same amount of targeted impressions as a digital ad-tech targeted buy at a much lower cost An example showcasing the comparative savings of Addressable TV for a targeted campaign All costs are estimates for the purposes of this analysis Reported Averages

Digital Ad-Tech Video Addressable TV

Est. CPM $12 $30

Total IMPs (000) 833.3 300.0

Budget $10,000

Est. % of Target 100%

Est. Bot Fraud 20%

$9,000

100%

0%

Viewable 45%

Adjusted IMPs (000) 300.0

Est. Adjusted CPM $33

0%

300.0

$30

"Addressable TV" Budget Savings: -10%

Source: For the example, bot / fraud data based on the ANA / White Ops 2015 Bot Baseline “Fraud in Digital Advertising” report, January 2016; viewability stats from U.S. Media Quality Report, 4Q’15, integral Ad Science; estimated Addressable CPM was based on addressable article in Adweek, 9/26/16. Estimated costs are for illustrative purposes only.



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SPENDING BY MEDIA TYPE

Looking For Funding? Well Consider Addressable The New Direct Mail Being Delivered Directly To Your TV Screen More advertiser dollars continue to be invested in Direct Mail nationally than any other media; so there is a significant opportunity for advertisers to go paperless and build a bigger impact with the sight, sound & motion of television

National Advertising Spend By Media Type $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 Direct Mail

Digital

Cable TV

Broadcast TV 2013

Magazines 2014

Radio

Syndication TV

Outdoor

Newspaper

2015

Source: SNL Kagan 2016; direct mail is reported under a national media line-item



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SUMMARY

Addressable TV Is A Win-Win For Advertisers And Viewers Alike

Advertisers win because their ads will run against a relevant audience in a premium environment. It’s also a more efficient platform than digital ad-tech targeting, so a greater number of “true” impressions can be delivered at a comparative cost.

Viewers win because they get to see more TV spots that are more relevant to them, which creates a better overall viewing experience



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CONTACT US

For More Information Visit Us Online TheVAB.com Follow us: @VideoAdBureau Like us: facebook.com/VideoAdvertisingBureau Sean Cunningham

Danielle DeLauro

President & CEO

SVP Strategic Sales Insights

212-508-1223

212-508-1239

Jason Wiese

Evelyn Skurkovich

[email protected]

VP Strategic Insights

212-508-1219

[email protected]

[email protected]

VP Strategic Research & Insights

212-508-1220

[email protected]