Addressable advertising is growing, but it might not take over everything

From left to right, Jamie Power, Jennifer Koester, Allen Klosowski and Joel Hassell discuss addressable advertising at the Pay TV Show. (Mike Dano/FierceCable)

DENVER—Players in the pay TV industry expect to see dramatic growth in the market for addressable advertising, but the technology might not take over every single advertisement and broadcast in the space.

“I still don’t envision a time when the Super Bowl will be all addressable ads,” said Allen Klosowski, SVP of the advanced solutions group at advertising technology company SpotX, here at the Pay TV Show. He explained that some ads are designed to reach the widest possible number of people, rather than specific demographics, and therefore Super Bowl ads probably won’t be delivered through addressable advertising technologies.

However, Klosowski and other speakers agreed that the market for addressable advertising is poised to grow, though they cautioned that growth will be contingent on major video providers like Comcast and Charter upgrading their legacy advertising systems to support addressable advertising technology.

“They get it. They understand it,” said Joel Hassell, CEO of Canoe. Hassell said that the companies that back the Canoe advanced advertising consortium—Comcast, Charter and Cox—see the appeal of advanced advertising technologies like addressable advertising, but that fully supporting such services requires them to make a major investment into their operations. “It’s just not there yet,” he said.

That’s not to say the companies aren’t trying, however. Indeed, Canoe just this week said it delivered 6 billion cable VOD dynamic ad insertion (DAI) impressions in the first quarter.

DAI technology allows providers like Comcast and others to swap out old ads with new ones inside their VOD systems. Addressable advertising, on the other hand, allows providers to show different ads to different households while they are watching the same program; for example, in the same program a middle-aged viewer might see an ad for a sports car while a millennial viewer might see an ad for a local bar.

“You’re not going to disrupt the entire industry overnight,” agreed Jennifer Koester, director of telco and video distribution partnerships at Google. Koester said that Google had developed technology that paves the way to support addressable advertising in providers’ existing, legacy businesses, but she said advertisers haven’t yet fully embraced the technology.

“It’s totally disruptive to the agency model” that most advertisers currently use, agreed Jamie Power, COO of addressable advertising technology vendor one2one Media. Specifically, she pointed out that the metrics around addressable advertising—in terms of who the ads are reaching and whether they’re successful—are still being worked out.

Nonetheless, Power said that “we’re finally bringing data to television,” which she said was noteworthy considering most major TV advertising purchases still occur during programmers’ upfronts, where media companies show off their latest content and advertisers decide whether to run their ads alongside it.

“I’m curious to see what the upfronts look like in five years,” Canoe’s Hassell said.

Power said that her company, one2one, continues to make progress in the space. Indeed, she said that the company is already testing real-time ad buying technology for video.

Addressable advertising continues to generate attention around the industry. For example, Dish Network said it has been partnering with comScore to measure the effectiveness of addressable advertising campaigns that span from linear satellite viewing on Hopper set-tops to Sling TV over-the-top watching on myriad devices. And Sinclair’s CEO recently pointed to growth in digital, network, programmatic and addressable advertising.