With advances in technology, media companies are now able to show different targeted ads to different households even while they’re watching the same show. Whilst this allows advertisers to target based on a range of different criteria, there are some risks that come with it. Here are the top 5 risks of addressable media advertising.
1. Fragmented audiences
The ability to personalise adverts is undoubtedly effective for brands and media companies, particularly those small businesses who are unable to afford national TV campaigns. However, consumers of addressable media aren’t so convinced this is a great idea. TV audiences have said that their main problem with addressable TV is that it fragments audiences.
2. Privacy concerns
When it comes to addressable TV media in particular in comparison with online advertising in general, it’s very heavily regulated. The issue with this is that brands have to make sure that any ads targeting individuals are compliant with the regulations, making them increasingly more difficult to get approved. Advertisers’ insight into consumer behaviour is likely to be restricted as e-privacy regulation gets tighter, which will have a huge impact on the way that they’re able to gain and handle cookie data from websites, for example.
3. Risk of low engagement
Because consumers of media tend to switch off when it comes to ads, it’s difficult to ensure that they’ll engage with any kind of ad, targeted or not. Addressable media solutions are created to connect with a target audience, but there’s always the risk of low engagement when it comes to advertisements.
When it comes to TV addressable advertising, being able to take advantage of a huge screen can reach audiences it otherwise wouldn’t be able to. However, with streaming platforms increasing in popularity, and Netflix in particular having 221.64 million subscribers, the majority of people skip adverts or ignore them altogether, making it extremely difficult for advertisers to reach consumers, even with specifically targeted ads.
4. Advertisers may be reluctant to spend on it
Because the majority of advertisers are used to trusted measurement data, they’ll likely be reluctant to spend large amounts of money on addressable media until they’re certain they can use the data, and combine it with the trusted data they get from the other places where their ads are shown. In the majority of markets right now, unified measurement of TV ads shown on screen via any service will still be unavailable, which is also likely to be one of the biggest constraints on addressable media reaching its full potential.
5. Growing competition
The number of platforms that can show addressable ads are increasing, and TV vendors are likely to start selling more space on their home screen as a way of generating revenue. Despite this, for addressable ads to really succeed, advertiser access to the market needs to be restructured to reduce the amount of business compromises that would have to be made to place these ads across a growing number of platforms.
So, overall, whilst addressable media advertising is effective, the reach of these types of ads will need to be extended in order for the risks to be reduced, and so that marketers can maximise its potential.
