Over the Top, Connected, Programmatic and Addressable Television! What Does It All Mean? Definitions and a Call for Research

The idea that television advertising will move to a situation where individuals watching the same programming will view different messages target to them has been around for some time, yet such expenditures have been slow to take off. Part of the reason of this is that that growth in the number of people with simultaneous internet access and television and mobile screens has been gradual. However, we are clearly approaching the point where this technology is poised to take off. In this article, I would like to explore the reason why it appears inevitable that addressable television is going to enter a period of growth while calling for research on the topic. While research on the topic of addressable advertising has been relatively sparse, I would suggest that readers take a good look at an article by Malthouse, Maslowska and Franks (2019) that suggests that addressable/programmatic advertising will grow, but that it will be contingent on three factors: distribution, ad inventory and data.

The terminology used in this space can be highly confusing to anyone who does not follow media planning. Thus, I will start with some nomenclature and define the terms ‘Over-the-top’ or OTT programming, connected television (CTV), addressable advertising, and programmatic advertising. The term OTT can be defined as referring to programming content or ads that are streamed via the internet to a device where it can be viewed, such as a television, mobile phone, or tablet. CTV has been defined as a television set that’s connected to the internet and facilitates the delivery of streaming video content (see Loredo 2018). When a television is connected, this means that the viewer is using the services of a wireless service provider as well as a streaming service, whether it is Hulu, Netflix, or a ‘traditional’ television network that offers streaming. Viewing can be done on any type of screen as long as it is linked to the internet.

Addressable television advertising refers to the ability of the programmer to show different ads to different households during the same program. This technology opens the door to some of the same type of use of data and customized communication we see in digital. For example, if a digital marketer knows a consumer has been doing a home search in a certain area and price range, the consumer may find listings of house in their Facebook or other social media feed. Finally, programmatic advertising is defined by Malthouse, Maslowska, and Franks (2018) as an approach that is marked by purchasing individual exposures informed by whatever data may be available about the device, cookie, household, etc. Often the media sale takes place on an ad exchange in real time through an automated auction, the message may be personalized, and sometimes the behavioural responses to the exposure can be tracked (e.g. clicks, conversions). Malthouse, Maslowska and Franks actually prefer the more academic term computational advertising, but as they observe, the term programmatic is more commonly used.

With a growing proportion of the population in major markets having access to connected television, addressable television is beginning to grow and warrants much more attention (Taylor 2019). It is difficult to see addressable do anything but grow, as improved targeting creates potential advantages for both consumers and advertisers. There three significant reasons for this. First, when implemented properly, addressable television advertising delivers a more relevant and interesting message to the consumer. For example, it can avoid a situation where single consumers see ads for baby strollers and diapers, while ensuring that parents for young children do. Second, addressable advertising can lead to efficiencies for companies in terms of being able to reduce waste circulations substantially and allowing them to hone in on their primary target audience. Third, the technology behind addressable allows for more focus on downstream advertising effectiveness measures (e.g., brand sentiment, purchase intention, and in some cases, even purchases). For example, NBC Universal was able to track purchases made in response to ads for a new Kevin Hart movie by tracking which viewers exposed to the ad made purchases on Fandango as was suggested in the ad (Smith 2019). Ultimately, downstream measures, compared to traditional reach and frequency (or attention, recognition and recall) leads to better measurement for return on advertising spend.

In addition to general research on the effectiveness of addressable television campaigns, research focused on measurement is needed. Also, as with digital (e.g. Knoll 2016; Kim and Song 2018) assessment of the effectiveness of various measures is needed. It has been also been observed that more work on cross-platform measures is needed (Ford 2019), and this can be facilitated by CTV technology. Just as with digital advertising, consumer privacy issues need to be researched in order to develop guidelines pertaining to how far targeting should go and where ethical boundaries might be crossed. Research on any of these issues is timely and submissions to the International Journal of Advertising on such topics are encouraged.

Charles R. Taylor
Villanova University