Addressability Explained


Consumer behavior is ever changing, especially with the consumption of digital media, purchase patterns, and consumer expectations. For consumer brands trying to establish a marketing strategy and build a loyal customer base, this can prove to be a really difficult environment in which to operate.

But the ability to achieve addressability at scale (AAS) offers huge opportunities for businesses to access consumers thanks to digital audience platforms on a previously unseen scale. Audience platforms have technology that enables delivery of targeted experiences to consumers at scale by using first-party data. The systems are automated allowing for content to be updated in real-time according to user habits, allowing for a consumer-centric personalized experience.

In light of this new data goldmine, marketers will need to master Connected CRM (CCRM) in order to take advantage of AAS. First-party data will need to be integrated as well as analytics throughout the customer lifecycle, allowing for the consumer experience to remain unchanged across first- and third-party audience platforms as well as on all devices. Some industry experts have estimated the potential value of AAS to be 10 times greater than current direct online marketing.d

But AAS it’s not yet as advanced as some would like it to be. There are several areas in which marketers would like to see progress. Although everything is not crystal clear right now, experts in the field expect these issues to be ironed out by the beginning of next year. These issues are mainly centered around intra-platform addressability — this comes following the success of “walled gardens” such as Facebook and Twitter, and addressability within the broadcast sector which has historically been a difficult space in which to innovate in but that could be enhanced thanks to new technology.

We will take a look at the potential scope of AAS as well as take a more in-depth look at the previously mentioned issues below. We will look at how each market will adapt to these fast- paced changes and what it means for marketing teams who are seeking to keep their company’s reach one step ahead of the rest.

Addressability and Platforms

Addressability was first shown to be a successful marketing tool within so-called “walled garden” platforms such as Twitter, Facebook, and Amazon amongst others. Platforms such as these use the data they collect on their users (proprietary data) to develop their addressable influence. The progress these companies have made within the sector has shown other developers that the principle works well and others are now seeking to take the concept out of these closed off communities and use it across other interfaces.

Access to the “walled gardens” is unlikely to be granted in 2018, there is no motivation for the companies to open their systems to the wider market. The platform that is at the cutting edge of AAS is Facebook, because of the amount of detailed data they are able to collect on users. But with its current level of success which looks likely to remain throughout 2018, it is unlikely that they would be looking to open up their business model for fear of losing their advantage within the market. It is expected that the “walled garden” platforms will instead seek to further widen their reach geographically, but there are signs that the dominance of the “walled gardens” may be reaching their peak.

While the quantity of data collected by these corporations is of great advantage to marketers and companies, the collection of this personal information is coming under increasing levels of scrutiny. Companies such as P&G have expressed their hesitance and being involved with “walled garden” AAS due to the dominance of the companies within the operating space. But the biggest potential threat to the companies who initiated the use of AAS is the development of systems will function across different platforms. The potential for data collection and targeting advertising is immeasurable if it reaches a stage where users’ habits are tracked across platforms and devices.

Effectiveness of Addressability Within Display

Over the past years, there has been a great deal of innovation in terms of the integration of paid for content within users’ display. There are now many formats that offer addressable content on a scale similar to that of Facebook. The current market leader may be gradually losing its edge in terms of volume, and in 2018 it expected that developers will unveil further moves to expand on the reach of non “walled garden” AAS.

Audiences are now being connected by using cookies, device identification, and mobile identification, as well as encrypted email information across different platforms and devices. Standards are now being established within the ID matching space, with the IdentityLink consortium (led by LiveRamp) allowing publishers to use a common backend identifier allowing for the recognition of users across multiple websites. Initiatives such as this allow for greater portability for consumers and addressability for brands.

Unlike “walled gardens”, solutions such as IdentityLink are rising in popularity so far this year and are set to continue to grow throughout the coming months. These alternative solutions do not require such imposing trade-offs for brands, with the potential of advertising being spread across multiple channels, which cannot be achieved with the current “walled garden” system. Openstack alternatives allow addressable audiences to be owned by the brand, which means their data can be ported from one platform to another as desired.

Broadcast Addressability

Spending on programmatic TV still only accounts for a low proportion of TV advertising budgets. A large proportion of media sellers are comfortable with the returns that current methods offer and overall the levels of interest in broadcast addressability is not anywhere near the level of internet based AAS. The concern amongst media sellers is that the introduction of addressability to their market could affect their current levels of revenue, and some argue that these fears are well founded. However, uncertainty alone is unlikely to prevent AAS from entering the broadcasting realm: brands are consistently seeking higher conversion rates and return on investment, both of which can be enhanced by using addressable technology.

Marketers have already capitalized on increasing cross-channel opportunities. Consumers’ viewing habits for live events are evolving and TV advertising will need to adapt to the cross-channel nature of this evolution.

Technologically speaking TV does not need to undergo a digital revolution in order to integrate digital buying approaches in addition to traditional targeted demographic information. Marketers will likely use offline data and prediction to calculate a score for a viewer’s likelyhood to convert for specific brands and products, much as they currently do for the online market.

Progressive media buyers will be looking at these advancements as a great opportunity to grow which will in turn challenge those who are currently more sceptical of the concept.

Scaling up Addressability

Collaborative Customer Relationship Management (CCRM) is central to the scalability of addressability. AAS is an opportunity to create an advantage for your company by standing out with the ability to offer targeted and personalized experiences for consumers. CCRM uses addressability to aid in ensuring content is correctly targeted, relevant and measures the impression content is having across the customer life cycle. CCRM is used for both online and offline channels and allows companies to gain further insight into their consumers’ patterns.

In order to take full advantage of AAS marketing teams will need to have understanding of a range of  new specific techniques in order to fully benefit from the method’s potential. So-called platform marketers have a deep understanding of CCRM as well as knowledge of the complex and fast paced digital space. This new breed of marketer understands identity and audience management, media and channel optimization, analytics and measurements as well as being able to ensure operations are compliant with consumer privacy laws and GDPR where applicable. They will also need to be able to create engaging content and understand the role of design in AAS.  

The trends of media and digital spaces are all heading toward the personalization of services in order to increase ROI. As these trends develop the requirement to make campaigns AAS-compatible will grow.

What We Can Learn from AAS of the Past

Targeted postal campaigns are considered the grandfather of modern day AAS, the United States Postal Service (USPS) was an innovator in analogue addressability. Both the USPS itself and outside contractors helped to optimize postal advertising by managing data to aid companies in increasing their reach. Companies and marketers then became experts in using this knowledge as effectively as possible, either by training up their own in-house team or by employing external marketing contractors. In effect, companies such as GEICO, Capital One and DirecTV were all operating CCRM systems before the terms was even imagined. Companies who had success using targeted postal marketing led the way towards the tailored marketing trends that are coming through nowadays.

Modern-day AAS has many similarities with its postal predecessor. Scale-wise, postal addressability was far larger than any other marketing practice in use at the time, much like AAS now, although with current advancements, companies are not facing the geographical restrictions that they would have been facing initially. New methods also lead to new services being created to allow for companies to take advantage of new marketing methods, Google has launched Google Display Network, Bid Manager and AdWords, all of which are designed to facilitate AAS. Facebook and Twitter have developed their own tools to manage AAS: Facebook Exchange and Custom Audience, and Tailored Audience amongst others for each of the respectively.

The real difference comes to the purchasing of advertising for modern addressability advertising. Companies are using real-time bidding, intent-based or segment-based targeting and most of these systems did not even exist a few years ago. The speed at which the space is growing and innovative tools are coming out to aid companies in accessing consumers means that having a good marketing team staying on top of the changes is invaluable to any company seeking to make the most of this new tech.

Take Away

While there are some issues that remain to be ironed out over the coming months, the potential to start taking advantage of addressability is already here and in order to do so effectively, companies will need to think about ensuring their current marketing teams are well versed in these new aspects of the digital space. The internet as a whole is shifting towards offering increasingly personalized experiences for users, and addressability is the link between companies and consumers. Both consumers and corporations will benefit from highly targeted advertising across multiple channels and platforms, allowing for the internet as a whole to feel more integrated across all of these. Broadcast addressability remains a stumbling block for now, however with the increased interest in addressability across the board media buyers will likely start adapting to CCRM and addressability in the near future. Live events in particular will be a space within which cross-channel AAS will come into its own, generating interest through broadcast advertising but also targeting viewers who are active on social media during the event for example.

The methods do go beyond the traditional realm for marketers, many of whom are now delving deeper into the topic and familiarizing themselves with the practice. Even at the end of 2017 addressability was still considered a niche advertising solution, but it is now being referred to as a potential new golden age in advertising.

As have seen, a broad range of skills are required from marketing teams in order to see the best return on addressability campaigns, but there is also great scope for businesses to take advantage of this new way of reaching consumers throughout their life cycle. However, for now addressable advertising is still being considered as complementary to traditional methods, but with the success of the “walled garden” and the introduction of independent addressability tools that are not restricted to specific channels the potential for growth is exponential.

About the Author Joshua Roy

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