Marketers have always struggled to understand the true ROI of their advertising campaigns. In fact, John Wanamaker’s poignant quote from the early 1900s, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half,” is just as relevant today as it was then.
There are many that believe that the emergence of digital video and CTV has solved the industry’s measurement troubles. It’s true, digital and CTV advertising have given advertisers targeting and measurement capabilities that are easier to implement than ever. These channels offer perceived precision to buyers and sellers and help reach valuable, namely younger, audiences across screens and formats. But they still have their fair share of challenges when it comes to accurate targeting, attribution, and measurement—in addition to persistent uncertainty about where the ad ran, or if real people even saw it.
Today, advertisers are still left questioning if they reached the right audience, which households (and ad exposures) converted, and how to best optimize for success due to the staggering inaccuracy often found in identity data powering targeting and measurement as well as ad fraud that can appear in programmatic buying.
However, all is not lost – the majority of capabilities available today would drive efficiency, efficacy and expand conversion if inventory, tech and measurement suppliers were building the offerings on a solid identity footing. That’s where authenticated addressable comes in.
Signal Loss is Impacting the Ability to Accurately Target and Measure
As we move towards a post-cookie world, there has already been significant signal loss, or the inability for a marketer (or their buying partner) to identify households and connect the household to audience data or outcome data, and deprecation that is affecting the ability to accurately measure reach at the household level. Simply put, signal loss impacts the quality – and value – of data used to make effective targeting decisions and makes it difficult to attribute an audience to an ad exposure.
As a result, if an advertiser is relying on an e-mail address or ID graph to link an ad exposure to the intended household, they end up with an extremely low accuracy rate and poor outcome. In fact, email to household match rates have been found to be 50% accurate at best, and IP to household matches, based on prevailing ID graphs, tend to be between only 30%-50% accurate.1
On top of this, most of the audience segment definitions buyers are utilizing are built on probabilistic household data, which is not nearly as accurate as deterministic data, and this adds further challenges into the equation. If you start a campaign not knowing if you are reaching 50% of your target audience, is your media working any better than it did for John Wanamaker at the turn of the century?
Unauthenticated Media is Watering Down Media Value
Even when an advertiser is using their own first-party data (let’s assume that it’s a legitimate and up-to-date customer list), the moment they match that audience to buy a CTV campaign, the accuracy is essentially cut in half when using hashed email or cookies as the match key. Some buyers may accept this standard, especially since the overall price is typically adjusted to reflect that accuracy. However, the real issue is that some advertisers are buying media while unsure of whom they are reaching, and how effective it is. The inability for measurement companies to measure households accurately, especially with the increase in cross-screen exposures, makes it impossible for the advertiser to truly know which ‘50%’ of the media they are delivering is providing value.
This is further exacerbated at the next stage in the campaign process – matching ad exposure to attribution to understand how or if the media drove a consumer action. At this point, there is a compounding effect on the error rate, which likely results in a percentage that is much less than half match of households who viewed the ad or performed the attribution metric of choice, like a purchase or website visit. By the time the advertiser gets here, the overall effectiveness of the campaign has been watered down, and it is nearly impossible to use the attribution data to learn how it performed, limiting the ability to inform and optimize future media campaigns effectively.
Authenticated Addressable TV Advertising May be the Answer
Amidst all this uncertainty, authenticated addressable is emerging as the antidote.
With this approach, an audience is authenticated against information such as MVPD subscriber or a streaming service registration, which all but eliminates the industry problem. In fact, it has been found that addressable match rates are more effective than digital and CTV, and that when matched to authenticated household data, can result in nearly 90-95% accuracy in audience targeting (even while taking into account consumer privacy opt-outs).2 Similarly, authenticated household data anonymously matches ad exposures to households to allow for robust measurement and attribution to occur. And, as a side benefit of buying authenticated inventory, much of the fraud and waste is eliminated, putting more media dollars to work.
In a time when content is fragmented across screens and platforms and where inventory is constrained, advertisers need to be able to confidently reach their target audiences. They need to be able to measure household reach and frequency to understand how their advertising is performing. Addressable TV is a powerful tool that can help close the loop between exposure and action, making it incredibly valuable in today’s media landscape. By leaning into authenticated addressable, advertisers can get the most out of their first-party data and make their media spend go further by dramatically reducing waste, fraud and inaccurate measurement. John Wanamaker would be proud.
Sources:
1. Truthset and CIMM Study, October 2023.
2. Comcast Internal Data, April 2023.