Why creative is key to unleashing addressable TV’s potential

Addressable TV has changed the paradigm of television advertising: pinpointing and serving high-value and hyper-focused audiences is now a reality, powered by intelligent technologies and data-rich analytics.

But are brands missing a trick when it comes to addressable? Just a tiny fraction of addressable campaigns are optimised for the medium or tested in a meaningful way before they hit the airwaves.

So, what can be done to ensure addressable television creative is hitting the mark and takes advantage of its immense potential?

That was the topic for discussion at a Campaign roundtable, held in partnership with Finecast, which brought together leading experts from the creative, advertising, and broadcast worlds. To highlight the opportunity many brands are missing, Finecast and System1 have taken a deep dive into how addressable TV ads can elicit emotion and their effect on business.

They found that addressable TV ads had a more significant long-term impact, induced deeper emotions (7% greater happiness and 6% fewer neutral reactions), and a quicker response – a key consumer driver of buying decisions.

Applying creative smarts
Kristian Claxton, managing partner innovation at Finecast Global, said one of the key criteria the study looked at is “spike rating’, which measures the effectiveness of a campaign to drive short-term actions. 

“Addressable advertising has a 7% higher spike rating than broad audience. To put that into context, one of our biggest UK customers has seen a 10% spike rating increase, resulting in an 8-12% increase in subscriptions, entertainment services, and mobile phone sales. These numbers represent a very meaningful shift and opportunity.

“We served around 11 billion household impressions in 2022, and fewer than 1% had any form of addressable creative. Not applying creative smarts means leaving performance on the table.”

Jon Evans, CCO at System1, discussed how the research highlights how much more effective addressable television can be compared with other advertising methods. “We conducted the study over several different channels, all of which have differing abilities to capture attention."

“If you compare addressable television with in-feed on Twitter, for example, it captures seven or eight minutes more attention on average. But once you get the targeting correct, the elasticity of that creative is huge. To take an extreme example, if you target people in their social feeds with poor creative versus addressable, you’re looking at a 20 to 30-times difference in terms of both minutes watched and, critically, the ability to recall the creative afterwards.”

AI: changing the addressable game
That these types of TV ads can reach desirable audiences on a deeper emotional level than broad audience campaigns is no great surprise, said Sara Holt, UK & Ireland group marketing director at Merlin Entertainments. 

“Addressable is always going to be more effective,” she said. “But showing an ROI has previously been hampered by the resources you need. It has been easier and more cost-effective for marketers to create one delicious ad.” 

Artificial intelligence (AI) is challenging that reality. Holt recently considered creative pitches from two agencies for one of Merlin Entertainments’ new attractions.

“Both pitches were brilliant, but one pitch edged it,” she said. “Part of the proposal was several personalised ads, which came in £300k cheaper. They’re using AI as part of the creative process, which is a big reason for such a saving. That’s not something that bothers me. I just want to be amazed with the creative – and I was.”

José Reyes,partner & chief creative officer at EY, joined the discussion about AI: “I’m really excited about the ability to do the ‘how’ aspect of campaigns more effectively.

“That capacity gives us space to have other crucial conversations, like: are we getting better performance because we’re speaking to people in an echo chamber, so showing baby ads to someone who’s just had a baby? Or are we seeing a 7% improvement because our creative is special?

“Everybody is going to have these tools. What will set marketers apart is how they can use insights to drive stories that capture the imagination. How can I get insights from first-party data to get customers to discover my brand or think about something they didn’t last week? Addressable TV allows me to have that conversation more interestingly.”

Protecting the TV medium
First-party data was a hot topic during the debate. Ralf Rau, global brand building & digital director, Essity/Bodyform, said: “Targeting is clearly a major reason that addressable ads are effective. The first-party data opportunities are attractive. Previously, you’ve had the choice of mass-reach TV campaigns or first-party data on digital platforms, so building audience profiles on Meta. 

“To have the opportunity to take what we’ve done on digital platforms and replicate that on TV is very interesting.”

TV holds a special place in the UK lifestyle and is still the nation’s most-watched medium despite a wealth of other options. It is also one of the most trusted platforms, which Chris Dunne, head of marketing at Thinkbox, says must be protected. 

“A real balance has to be struck,” he said. “Trust in advertising is low, and bad practices in the digital world drive a lot of that sentiment. There’s a receptiveness to TV advertising, particularly addressable, which is commonly served when people watch video on demand and tends to be content of higher quality. 

“That high level – both in creativity and practices – must be maintained. To use bad habits of digital targeting completely undermines the premium environment addressable ads are served in.” 

Read the full report from Finecast and System1 here