Spending on Addressable TV Ads to Hit $3.3B by 2020

Spending on addressable TV ads is expected to rise to $3.3 billion by 2020, up from $2.1 billion in 2018, according to a new report from the Video Advertising Bureau.

The VAB found that 40% of marketers and ad buyer using addressable TV said they are making a significant investment in the platform, and 62% said addressable TV is a valuable part of their media buy and plan to increase how much they spend on it.

Addressable advertising is still a new tool to marketers. The VAB found that 71% of marketers using addressable TV have been buying it for less than one year. The study found that 15% of advertisers are including addressable TV on a regular basis and 35% have experimenting with it.

In the report, called Address for Success, the VAB, which represents most of the big national TV networks and multichannel video programming distributors, estimates that the addressable TV audience in the U.S. is 162.2 million people, up 30% from 2016.

The report includes case studies from several MVPDs describing campaigns for marketers in a variety of categories. The addressable campaign provided higher ad relevancy, precision targeting and improved return on investment.

One campaign for a cruise line conducted by AT&T’s Xandr unit ran for four weeks and targeted members of the line’s loyalty program plus consumers who have sales three or more times in the past three years. The campaign produced a 200% surge in unaided TV ad awareness, an 87% lift in aided ad awareness, a 25% growth in aided ad recall and an 8% gain in aided brand awareness.

Another campaign for an automaker looked to boost declining SUV sales. The 5-week campaign targeted auto enthusiasts, competitive SUV drivers and people with luxury lifestyle. Compared to a control group, the buy rate for the target group was 518% higher. There was a 36% sales lift during the first 30 days of the campaign and a 48% increase over 90 days.

Parts of the report were shared during Broadcasting & Cable’s Advanced Advertising event on Monday.

“The real-world cast studies in this guide illustrate how addressable can deliver not only bottom of the funnel results, but also higher-order metrics, such as brand awareness, ad recall and purchase intent,” said VAB CEO Sean Cunningham. “Through full-funnel activation, marketers can segment and target the right consumer, checking each stage of the purchase process.”

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.