New study highlights addressable TV’s role in boosting linear campaign reach

Go Addressable, in collaboration with the Coalition for Innovative Media Measurement (CIMM), has released findings from a new study underscoring the effectiveness of addressable TV advertising in augmenting the reach of linear TV ad campaigns.

The study, titled “A Guide to Best Practices in Planning and Buying Addressable Television Advertising,” offers insights into the evolving TV ad market, particularly highlighting the complementary nature of linear and addressable TV advertising.

Addressable TV advertising allows for the serving of targeted ads to specific households or users, marking a significant step forward in achieving cost-effective reach and frequency for advertisers. The study demonstrates that incorporating addressable TV advertising into a brand’s media mix can consistently achieve about 40% reach, irrespective of the marketer’s target audience penetration.

The joint study by Go Addressable and CIMM, which involved comprehensive research and analysis by Janus Strategy & Insights and Sequent Partners, included interviews with 20 agency and publisher stakeholders and an in-depth analysis of 145 addressable TV ad campaigns. The findings reveal that addressable advertising delivers incremental reach to both large and small linear campaigns and is more cost-efficient in adding incremental reach than linear alone.

One of the study’s key insights is the efficiency of addressable eCPMs (effective cost per thousands of impressions), which are found to be more efficient than linear eCPMs, especially for light linear TV viewing audiences. Moreover, the study highlights the precision of MVPD (multichannel video programming distributor) addressable TV over IP address matching, with a significantly higher match rate for addressable households.

Addressing a common misconception, the study points out that MVPD addressable TV is not only for older adults but plays a complementary role with CTV addressable in reaching adults aged 18-49. This dispels the notion that CTV addressable is primarily for targeting younger demographics, suggesting a more nuanced approach to audience targeting across platforms.

The report also lays out five best practices for buying and planning addressable television advertising, aimed at helping advertisers and media buyers navigate the complexities of today’s fragmented media landscape. These include developing a detailed audience target profile, benchmarking the linear TV effect, and determining the optimal mix of linear and addressable TV advertising to maximize reach and efficiency.

Key findings from the report include: 

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• Addressable consistently delivers about 40% reach regardless of target audience penetration. Low penetration brands (defined as those with penetrations under 20%, achieved target audience reach between 37 and 45%, on average. High penetration brands (defined as those with penetrations over 70%), meanwhile, saw similar results, with target audience reach between 37 and 44%, on average. The key takeaway here is that addressable TV advertising can help build reach regardless of a brand’s target audience penetration.
• Addressable delivers incremental reach to both large and small linear campaigns: Addressable TV adds incremental reach when linear reach begins to plateau, making it more cost efficient. In fact, addressable TV is found to be between 20% and 30% more efficient in adding incremental reach than linear.
• eCPMs for addressable campaigns are more efficient: Even with higher target audience penetrations, addressable eCPMs (the effective cost per thousands of impressions) are more efficient than linear eCPMs when it comes to light linear TV viewing audiences.
• MVPD addressable TV is more precise than IP address matching and outperforms it: An analysis found that 95% of addressable households were matched via postal address compared to 60% via IP address. After 30 days, 82% of addressable homes remained accurately matched compared to 44% of connected television (CTV) homes.
• MVPD addressable TV is not just for older adults: While many buyers believe that CTV addressable is best used to target younger audiences and multichannel video programming distributor (MVPD) addressable is best used to target older audiences, the data show that CTV addressable and MVPD addressable play complementary roles in reaching adults 18-49.