targeted advertising

Despite the shift toward digital advertising expenditures, eMarketer said in its most recent forecast report that targeted TV ad spending is on track to grow over 65 percent this year.

The firm said it expects targeted, or “addressable” television ad spending to reach $1.26 billion by the end of the calendar year. The figures include broadcast and cable TV spending, but excludes digital.

“Addressable TV ads are targeted ads delivered by a cable or satellite provider via Internet-connected set-top boxes,” eMarketer researchers said in their report. “The ads mainly target viewers based on age and gender. They can be seen during live broadcast/cable viewing or during on-demand viewing.”

Oscar Orozco, senior forecasting analyst at eMarketer, described addressable TV as a seller’s market. “Even though cable and satellite providers have the capability to target 74 million U.S. households, they are rationing the inventory. Some targeted TV ads command lower prices and measurement capability is limited at this point.”

But that may change as the addressable TV market expands. Orozco said while 75 percent of households in the U.S. have cable or satellite boxes that are “capable of delivering targeted ads, addressable TV spending will make up just 1.7 percent of total TV ad expenditures ($72.72 billion) in the country this year. By 2019, that proportion will grow to 4 percent.”

Also on track to see significant growth this year, albeit with equally low share of the total market, is programmatic TV. Emarketer sees this segment expanding by about 75 percent this year to $1.13 billion.

Orozco said the “advanced targeting aspect of programmatic TV ad spending is sophisticated.”

“However, pure automation from beginning to end is still not as advanced as it is for digital programmatic,” he added. “Currently, ad placement is still generally done manually. For programmatic TV ad spend to grow as fast as we’ve seen on the digital side, it must advance to complete automation.”

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