Addressable TV flips the traditional TV advertising buying process on its head: Instead of selecting network or program to advertise on, you select the audience (households) you want seeing your ads. Ads are then delivered whenever that audience members are watching TV. It’s really that simple.
No additional action is required by the viewers to see the ads, which appear as regular commercials would.
Two of the eight ad minutes per hour of content are available for addressable TV advertising—which has been growing in recent years. Spend on addressable TV advertising doubled from 2015 to 2016 and will reach $2 billion in 2018, according to eMarketer.
The current ecosystem is composed of multiple-system operators (MSOs), including Cablevision, Charter, Comcast, DirecTV/AT&T Adworks, and Dish (Cox to become addressable in 2017). Collectively, they represent roughly 50 million households that are available for targeting.
The technology that enables addressable TV rests in the set-top boxes provided by each company. The set-top boxes give each household a unique identifier and allow for the aggregation of TV viewing data.