ITV to take on Google and Facebook with addressable TV ads
ITV is planning to offer addressable TV advertising by the end of the year, according to deputy managing director for its commercial division Simon Dalglish. He said ITV, like Channel 4, is talking to "set-top box manufacturers, the TV manufacturers, the delivery systems that provide data plays" about possible solutions. TV broadcasters are hoping addressable advertising will help them take share from Facebook and Google. However, advertising insiders warned that the granular nature of data from addressable ads, which allow individual households to be targeted, could mean smaller audiences for some campaigns. Revenues at the broadcaster slipped 9% to £393m during Q1 2017.
ITV will allow advertisers to target TV ads on a household-by-household basis within 12 months in the hope of wooing smaller businesses that would otherwise spend their budgets with Facebook and Google.

ITV to launch addressable TV within the next 12 months as it declares ‘we want to take Google and Facebook’s ad revenue’..

Discussions on how this will be delivered are still ongoing and as such the broadcaster is coy on the detail. However, the deputy managing director for its commercial division Simon Dalglish claimed that, regardless how these meetings pan out, ITV would “offer accountable data, which would be third party verified and delivered across all our assets”.

By saying “all our assets”, he can only mean both the broadcaster’s on-demand and linear inventory. Yet, to reach linear TV viewers, ITV is going to need to understand who is watching what in real-time, information it can only really access from a set-top box. Even then it would need to overcome privacy issues ahead of next year’s pan-European data privacy reforms as ads would be targeted using a person’s IP address, post code or - as Sky AdSmart’s does - deterministic data.

Unable to access this data from a sole source like Sky can through its set-top boxes, ITV has taken inspiration from Channel 4. Partnerships with Adobe’s Tubemogul and Yospace underpin the Gogglebox-maker’s own effort and it would seem these are the types of businesses ITV is currently meeting. When asked whether any of those meetings are with an ad measurement firm given the broadcaster’s wish for independently verified addressable ads, Dalglish drew comparisons to Channel 4, which wants a similar tie-up with Moat.

“Channel 4 and us [at ITV] are pretty much going in a very similar direction in terms of what we’re going to be delivering,” admitted Dalglish.

“It’s [ITV’s addressable TV plan] is not going to be one system. It will be an amalgamation of different systems… the conversations that we’re having [with the industry] have not been exclusive, they’ve been inclusive. We want to talk to as many partners as we possibly can to make sure that when we do launch our proposition that we have the best one possible. The set-top box manufacturers, the TV manufacturers, the delivery systems that provide data plays for us… all these are important. I can’t go into more detail because we’re at a delicate stage of our development.”

Discussions like these are becoming more commonplace amongst broadcasters. Sky, Channel 4, Channel 5 and now ITV are all experimenting with adtech as the buy – and sell – side appetite for programmatic TV increases. Today, addressable TV is the preserve of the few as seen in an eMarketer study last October that found only 4.1% of marketers in the UK either ‘evaluated’ or ‘initiated’ addressable TV to improve ‘data-driven’ advertising. Moving forward, it will become top of mind as traditional TV moves to on-demand connected TV and connected TV expands from primarily subscription to primarily ad-funded.

Should UK TV viewers soon expect a deluge of ads tweaked to their individual households? Maybe, if ITV and its peers can successfully show smaller advertisers that what they’re offering can cuts the wastage out of TV advertising.

These are the advertisers that invest the bulk of their budgets online and these are the ones that ITV et al hope to woo – not big global brands such as Unilever or Procter & Gamble. Smaller businesses like a local restaurant are loathe to spend what little advertising budget they have into a channel as expensive as TV, viewing its mass reach as wastage. Bigger advertisers, on the flipside, see TV as the focal point for which channels hinge on.

As Procter & Gamble’s global media director Gerry D’Angelo puts it, the targeted approach won’t be for every brand.

Speaking at the Festival of Media, the FMCG marketer said: “Like many other large advertisers, we are clear about what will grow our business. We want to be talking to as many of our category buyers as possible, as often as possible. It sounds a bit generic and vanilla, but that is the fundamental of how marketing is going to be driving growth for any brand.”

“At the same time, there is nothing to stop you segmenting this broad grasp of category buyers in order to drive precision, personalisation and targeting. It’s not that personalisation per se is a bad thing; we just don’t want to follow it out of the window and start talking to a much smaller slice of our audience.”

If ITV is to succeed in convincing smaller businesses to change the way they think about TV, then Dalglish believes it could become a viable competitor to Facebook and Google. For too long, he claimed, it’s been “cool” and “trendy” to discredit TV but now, amid a wave of concern about the efficacy of ads online, those chickens are coming home to roost.

“Clients need to wake up and see what’s happening as they’re being bamboozled,” Dalglish rued.

Like the ignorant ruler from the literary classic ‘The Emperor’s New Clothes, he claimed “digital is bollock naked” and “they [advertisers] think he has a lovely coat on”. Dalglish went on to urge marketers to be “more testing of their partnerships with Google and Facebook” to better discern between what is and what isn’t working.

To ram home the point, Dalglish took aim at Burberry, whom he saw at the Festival of Media admit to deliberately keeping a multi-million, star-studded Christmas ad (see below) off TV. The fashion brand said 21 million online views was enough to vindicate the decision, an opinion the TV executive was quick to discount.

​​“A view on YouTube is 50% of the pixels for two seconds,” he rued. “You [Burberry] have just done an expensive, massive film and someone’s only seen the top right part of someone’s hand. Sometimes we’re using language which doesn’t describe what’s happening. We’re using words like ‘view’ when it’s not a view, it’s a glimpse. I think we need to be more honest with ourselves.”

Experts have mused whether the rising tide against online media is lifting the proverbial boat for TV broadcasters. For the first time, the question marks over measurement have meant that the online giants are on the “back foot”, opined Steve Ackerman, managing director, Somethin' Else.

Smelling blood, broadcasters spy an opportunity to snatch back some of the ad revenue taken by Facebook and Google. Indeed, ITV’s latest financial results last week (10 May) made for a sobering read; advertising revenue fell 9% to £393m in the first three months of the year, while its share of audience has slipped from 23% to 21% since 2010, according to BARB.

Few expect a reverse in TV’s fortunes unless broadcasters can stake a claim for data-driven budgets. Yes, TV advertising revenue topped a new high of £5.3bn in the UK last year, according to the Advertising Association, but advertiser interest in the medium is becoming harder to grow. In 2017, internet ad spending will rise 8.5%, while TV advertising is tipped to slip 0.5%.

“Therefore, strategically it makes sense that “now is the time for ITV to make great play of addressable TV” and how it can offer a “measurable, accountable alternative to Facebook and YouTube,” added Ackerman.

The battle between terrestrial broadcasters and the online world has constantly been one of a demand for an equal approach. And while they smell blood now, Dalglish and his peers should be wary of getting into an all-out fight with Facebook and Google without having the answers to the questions being asked of them now.

They too will have to answer questions like ‘how accountable can you be?’, ‘how many people viewed that ad?’, ‘what direct impact did it have on sales?’, plus ‘where did the ad appear exactly and at what frequency?’

“The more they [broadcasters] go down the route of addressable TV and the granular nature of data, then the more likely they’ll be dragged into the weeds,” according to one anonymous source close to ITV.

“I don’t think TV understands just how granular it’s going to be pulled down if it tries to fight like-for-like with Facebook or Google. I think [broadcasters] need to concentrate on making TV addressable based on the data from other platforms, which is what Dalglish is talking about, but still talk about the power of TV and its ability to build brands.”

The risk they allude to is the one of short-termism that has left many marketers demanding more-for-less. ITV might justify a £50 CPM for 15-to-34 year olds with the usual fanfare about TV being a trusted, mass-reach, safe haven for example, yet online that same audience could be reached for one or two pounds. Whereas only some of that audience on TV will be of the desired demographic, online advertisers can make sure their pounds only reach 15-to-34 year olds.

Faced with tighter budgets and tougher targets, brands are drawn to the cheaper – if not always safer – online alternatives. “We’re not just standing up to Facebook and Google with [addressable TV], we want to go and take their market,” concluded Dalglish. “Everyone talks about them taking ours [ad revenue[, we want to take theirs.”