Addressable Advertising & Its Importance Explained
While there are many factors that contribute to the success in marketing and advertising, few are quite as significant as addressability.
But asking what addressable advertising means may get you a grab-bag of different responses, depending on who you ask.
That’s because the concept of audience addressability is emphasized differently within the context of different types of advertising.
In this guide, you’ll learn the basic definition of addressable advertising, as well as how different channels use it as a technique for measuring the effectiveness of their ads.
Table of Contents
- What is addressable advertising?
- What is an addressable audience?
- What is addressable media?
- The evolution of addressable advertising
- Addressability on social media
- Addressability in OTT, Smart TV, and vMVPD
- Addressability in DOOH
- Addressability solutions for modern ad serving
What is addressable advertising?
At a basic level, addressable advertising, also referred to as addressable media or addressable marketing, describes advertising efforts that are confirmable as having reached an audience.
To be truly categorized as an addressable advertising action, the results of the advertisement must be measurable in some capacity.
What is non-addressable advertising?
In contrast, advertising efforts that reach undefined audiences, are untraceable, and cannot have their results measured are considered non-addressable forms of advertising or media.
As an example of non-addressable advertising found in traditional media, an ad placed on the front page of a newspaper would be considered a form of non-addressable advertising.
While reaching as many people as possible is generally desirable in advertising, it’s also important to reach the right audience.
What is an addressable audience?
An addressable audience is a group of people that share a defined set of criteria which qualify them as ideal candidates for consuming and engaging with an advertisement.
An advertising campaign’s addressable audience is the total number of people that can possibly be reached, all of which match the specified targeting criteria of the campaign.
As a concept, addressable audiences take addressable advertising a step further by defining the criteria of an ideal target audience to reach with an advertising message.
For instance, if a blog averages 1,000 visitors per month, and 500 of those visits come from posts about running – if an advertiser were to approach the publisher of the website with a campaign for running shoes, 500 visitors would be that advertiser’s addressable audience.
Optimizing non-addressable advertising for better relevance
Audience addressability and advertising relevance are two different concepts.
Again – in order to be considered an addressable audience, the engagements of the audience must be measurable in some way.
As a different example of optimising a non-addressable advertising technique to better reach a relevant audience – an aspiring rock band may wish to advertise their latest concert performance to promote the date and location of their show.
To increase ticket sales, the band determines that based on the genre of their music, their ideal audience is likely to be high-school and college students.
They choose to use a form of non-addressable advertising by printing and placing posters around school areas.
While non-addressable (because the results of the posters can’t be tracked) – the selected locations are more likely to reach a relevant audience than a generic location, like a city bus stop.
In the context of modern digital media, the same concept can be applied to where advertisements are displayed online – including different websites, social media platforms, and even different types of devices – such as tablets or Smart TVs.
What is addressable media?
Addressable media is nearly the same as addressable advertising, but is used within the context of digital marketing as a term that describes digital platforms that support addressable advertising functions.
To continue the previous example, the same rock band may choose to use a form of addressable media by sharing their concert details on social media channels (which can track views and likes – making them an addressable form of advertising).
To increase their addressable audience reach, the band selectively posts to social interest groups that have generally younger demographics that align with the campaign’s audience criteria.
The evolution of addressable advertising
While the basic concept of addressability has remained the same over the years, its practical application has been prone to shifting throughout its evolution.
As trends in technology have advanced, the places where people spend most of their time has changed too – forcing marketers to adjust their addressability strategies in tandem.
Traditional advertising addressability
Before the internet (during an era when dinosaurs roamed a greyscale earth), addressability relied heavily on physical mediums to deliver messaging to relevant audiences.
Direct mail and print ads in magazines and newspapers were extremely popular.
Addressable audiences were compiled by using postal address data, as well as subscription details that were mailed to publishers (think National Geographic or Nintendo Power).
While mediums like television and radio were also used for advertising, they were considered non-addressable outlets at the time, as they lacked the tracking features that modern digital platforms offer that make them into addressable media platforms.
The advent of digital advertising addressability
When the popularity of the internet increased in the 90s, marketers realised that people were spending more time in their inboxes.
Email marketing picked up popularity.
It also wasn’t long before the first web ad was served in 1994.
While it took about another decade for social media platforms like MySpace and Facebook to emerge, they too soon generated enough buzz to warrant attention from marketers.
Additionally, platforms like TVs and radios moved online – converting them into addressable media platforms.
Fast forward to 2020 and beyond, and digital ad spending has been increasing by 10% or more year after year.
It’s not a trend that’s expected to stop anytime soon, though new challenges have arrived for audience addressability that both publishers and advertisers will need to contend with.
The challenges & importance of modern addressability
Challenges have always existed in audience addressability.
An article by Dr. Augustine Fou has suggested that despite $350 billion being spent on digital advertising, that many remain unsure of the results that spending produces.
However, more so than ever, the advertising world has been scrambling at the news of Google’s announcement to end third-party cookies by late 2023.
Third-party cookies have long served as advertising’s lynchpin to creating digital addressability and confirming the scale of addressable audiences online.
Marketers have traditionally relied on cookies to identify known information about users in order to confirm that their advertisements are reaching their ideal candidates.
With Chrome being used by about 65% of the internet’s user base, the update that removes support for cookies is one that can’t be ignored.
The web is transitioning to a privacy-oriented climate.
Without cookies, digital advertisers will still be able to place their ads in places that are likely to increase their relevance, but may be forced to use methods that stray from the high level of overall addressability that they’re used to.
Many forms of digital advertising are going to be shifting towards a setup not unlike the earlier example of a rock band placing posters around school areas – rather than generic bus stops – to maximize their advertising relevance despite the absence of addressability.
Marketers have begun preemptively adopting new solutions to future-proof their audience addressability, such as contextual advertising and identity resolution.
The situation is different for each platform on the web.
Here’s a look at how each channel is adapting.
Addressability on social media
Organic sharing on social media is among one of the least affected channels for digital audience addressability. After all, these platforms don’t rely on cookies to operate.
Because most social media platforms collect first-party user data, advertisers will also continue to have paid direct access to a variety of addressable audiences through these channels, despite the departure of third-party cookies.
Publishers and advertisers alike may want to consider implementing a social media strategy (organic, paid, or both) in preparation for Google’s latest update.
A video by Amanda Webb highlights how audience addressability works for social channels.
She shares that focusing on advertising your social platform, creating shareable content, and engaging through authentic conversations can all help to grow a following.
But follower counts aren’t everything.
Two channels with 1,000 followers each may have drastically different sizes of addressable audiences, based on a variety of factors, including the type of content they post to their feed.
Factors like hashtag selection and the organic shareability of content can allow even a small social channel to reach a much greater addressable audience than its current following.
If hundreds of people share a piece of content to their own feeds, a single message has the potential to address the audience following the people who share that message.
Amanda mentions, however, that it’s also critically important to keep the addressable audience in mind when developing an organic sharing strategy.
After all, a message is only effective if it’s being circulated through members of an addressable audience as they’re defined in a campaign’s marketing objectives.
Addressability in OTT, Smart TV, and vMVPD
OTT (Over-The-Top), Smart TVs, and vMVPDs (Virtual Multichannel Video Programming Distributors) are in a similar position to social media when it comes to addressability.
Because these platforms don’t rely on cookies, many brands are turning to these kinds of video services to ensure that they’re still able to reach relevant addressable audiences.
Video platforms have the added benefit of naturally acquiring first party data, including PII (personally identifiable information) from their users, as well as access to device data.
In addition to all of that, these platforms can easily assess a user’s viewing tendencies, creating further opportunities for advertisers to target ads towards relevant audiences.
Advertisers using video platforms to deliver their messaging are likely to retain most of the advertising addressability they’ve been used to in the past – an appealing option for many.
Addressability in DOOH
DOOH (Digital Out-of-Home) is a format of advertising which takes a unique approach to addressable advertising.
Through various sensors and tracking technologies, remote advertising screens are able to serve ads based on factors like crowd density, weather, time of day, and more.
While specific individuals can’t be targeted based on their personal interests, addressable audiences can certainly be reached by advertisers who target certain environmental criteria for their campaigns.
For example, an ad displayed on a highway overpass during rush hour that cracks a joke about being stuck in traffic might yield memorability for a car manufacturing brand.
Similarly, large events, such as New Year’s celebrations are famous for screens that display advertisements from some of the world’s largest brands on outdoor screens.
Despite being a somewhat “avante garde” method of advertising for small to medium brands, DOOH is primed to offer some serious addressability advantages in the age of privacy-based advertising.
Addressability solutions for modern ad serving
Addressable advertising and addressable audience reach have been taken for granted by the entire ad tech ecosystem for years.
Many advertising platforms and tools which were previously classified as addressable will soon be recategorized as non-addressable or “grey area” channels.
Fortunately, there are several addressable advertising solutions already in development.
Firstly, Google has proposed their FLoC and FLEDGE updates – with FLoC offering a contextual advertising solution, and FLEDGE seeking to emulate traditional retargeting ads.
However, these updates from Google have fallen under some heavy criticism from the internet, and they aren’t confirmed at the time of writing.
What’s more is that publishers and advertisers who rely on these solutions will be entirely at Google’s mercy when it comes to service fees and non-negotiable revenue cuts.
For publishers and advertisers that seek to keep control of their audience addressability and ad revenue, self-owned and operated contextual advertising solutions are one of the best options available at present.
Content which is contextually tagged serves as prime real-estate for naturally occurring addressable audience traffic: people who like cars are going to visit websites about cars, and fashion enthusiasts are going to be browsing sites with the latest trends.
Because context doesn’t rely on the personal details to create an addressable environment, publishers and advertisers may be able to bank on this technique as a lucrative channel for creating direct deals with one another.
If you’re planning to increase ad serving addressability in a cookieless world, consider developing new ideas with those who understand the shifting landscape.
The AdButler team has over two decades of experience in providing and configuring ad serving solutions for both publishers and advertisers.
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