CMDC Media Digest, 2015-2016

cost efficiency gap between traditional or linear TV and addressable online that clarifies why TV ad revenue and in fact all mass media ad revenue is in decline while internet ad revenue is in its ascendancy The 4As report on Data Driven Video March 2015 reinforces the notion that the twin threats of insufficient ability to target and resultant revenue decline are behind the TV industrys new found search for the holy grail of addressability As the report states Given the real threat of dollars moving away from traditional TV networks the television world has been making strides in being able to deliver similar types of targeting for marketers Cord cutting the growth in online video consumption increased usage of the TV set as online monitor and more smart TV penetration are all examples of consumertriggered behaviour forcing the TV industry to rethink its business model which means thinking about addressable TV How far has this rethink gone It depends on the country SKY AdSmart probably represents the most developed form of commercial addressable TV in play today BSkyB the company that operates AdSmart is a satellite platform and broadcaster in the U K capable of serving different ads to different Sky households watching the same program based on factors like age location and number of occupants In the U S cable companies can locally sell two minutes of commercial time per hour and many companies have employed variations of addressability into their systems Again turning to the 4A report heres a summary of the current status of TV addressability in the U S ADDRESSABLE TV IN CANADA Three conditions need to be satisfied before pure addressable TV can exist Condition 1 A rich set of household targeting data Condition 2 Dynamic ad serving of an individual commercial against a specific household Condition 3 The individual household must be able to independently download TV In Canada Shaw Rogers Bell Media and Telus are holding their addressability cards close to their chests There are infield tests and plans for tests as well as visions that need testable plans that cant be detailed here because of confidentiality issues It is however safe to say that there are roughly four kinds of addressable TV initiatives in play in test or under consideration in Canada that satisfy some or all of these three conditions Video on Demand VOD Satisfies Condition 2 and Condition 3 Some of the set top boxes that VOD subscribers have installed in their homes make provision for a type of ATV to occur Additionally fancy serving technology allows a TV commercial to be served to the ordering household CURRENT STATUS OF LINEAR ADDRESSABLE TV 28MM Addressable TV HHs 30s 60s 56 networks 12MM Addressable TV HHs 30s 60s launching 15s shortly data aggregated from over 5MM boxes over 78 networks 8MM Addressable TV HHs 30s 60s over 78 networks 19MM Addressable VOD HHs estimated 4MM Addressable HHs with 10MM by end of 2015 Video On Demand DAI TELEVISION VIDEO ADDRESSABLE TV 91 Media Channels CANADIAN MEDIA DIRECTORS COUNCIL