The people who run one of the nation’s best-known broadcast networks think they’ve come up with a way to slow the flow of ad dollars from traditional TV to streaming-video rivals.
CBS plans sometime in the second half of 2021 to start making available new technology that will let advertisers buy commercials that are sent only to a particular subset of the network’s viewing audience. These so-called “addressable” ads can be coded in such a way that they reach only consumers believed to be interested in buying a truck; executives who make decisions about business software; or families expecting their first child.
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Advertisers running an ad campaign on CBS can “give it a protein shot,” says John Halley, chief operating officer of advertising revenue at ViacomCBS, by using the new technology.
Addressable ads have been around for some time, but largely available only to marketers who buy commercials via digital or cable. Most TV advertisers have long purchased them from cable and satellite distributors, who place them in the two minutes per hour they get from the networks they distribute.
But the appeal of such an ad on a broadcast network like CBS is hard to overstate. Traditional TV audiences are eroding quickly, to be sure, but the networks still deliver large audiences all watching the same thing at a single moment. On Pluto, Hulu, Peacock, HBO Max and elsewhere, subscribers watch whatever they like whenever they want.
The new-tech CBS ads will surface on screen when the network runs promos for its own shows, which usually appear in the moments between the last scene of a comedy or drama segment and the first ad in a commercial break. ViacomCBS executives envision some advertisers simply buying addressable spots that aim for specific viewer niches and others creating special versions of their national campaign for certain consumer groups. Imagine if a big insurance company ran a new ad featuring a funny character or clever slogan on CBS, and then dispatched separate spots to motorcycle owners or apartment renters.
The company even plans to send out promos for its own stuff via addressable technology. “If you’re an ‘NCIS’ viewer, you probably don’t need to see an ‘NCIS’ promo,” says Mike Dean, senior vice president of advanced advertising at ViacomCBS, in an interview. “Maybe you should see a Paramount Plus promo.”
As the media sector gears up for its annual “upfront” sales session, much of Madison Avenue’s focus is on the rise of streaming video. But there’s still something to be said for TV. A lot of big advertisers continue to use it and need the sizable audiences it continues to generate to reach consumers in a cost-effective manner. In recent months, however, Madison Avenue has split its attention. Advertisers tend to rely on digital venues to deliver targeting while counting on linear ones for size. The new technology “embraces a model that doesn’t make advertisers choose,” says Dean. ViacomCBS already sells addressable ads on its cable networks, and also plans to add addressable ads via smart TVs on the same timeline as it will the broadcast network.
“This modernizes the ad-supported TV ecosystem,” says Chris Geraci, an ad-industry veteran who is chief client officer for Adcuratio, an ad-tech company that has worked with ViacomCBS to create new addressable formats. The executive envisions a future when advertisers in some of TV’s biggest events, such as football games, can run the sort of big-splash commercials they always have, and also choose to scatter addressable spots to dozens of different audiences across the country.
ViacomCBS, says Dean, can send “hundreds” of different addressable commercials via CBS, with each being seen only in the homes of the select group of consumers for which it was designed. The ads are “lit up,” or primed for distribution, with the use of digital signals that tell a smart TV, a TV station or a set-top box to fill a commercial slot with the spots.
No one thinks the addressable ads will stop the surge of streaming — or Madison Avenue’s interest in courting binge-watching audiences. “The cynic would ask where has this been for the last ten years,” says Tim Hanlon, CEO of Vertere Group, a consultancy that works with media and advertising firms. “I applaud it finally happening, but it feels a little late to the party.”
ViacomCBS believes the technology will give advertisers new reasons to whoop it up. One advertiser who uses the company’s addressable advertising on cable believes it has helped his company’s commercials make a more meaningful impression on the people who see them. “As linear ratings continue to decrease, it is more important than ever to ensure that our media dollars work harder for us,” says Jimmy Bennett, vice president of marketing for Wendy’s. The fast-food chain found addressable ads were 22% more effective than regular spots it ran in 2020 to promote breakfast. As people continue to change the way they watch their video favorites, Bennett says, his company needs to find “the right Wendy’s consumers and drive sales.”
CBS may be ready to stuff its commercial breaks with dozens of ads, but viewers won’t see any of them unless they are among the consumer targets which the advertiser has ordered. “In the early days of the internet, you had ‘pop-over’ ads, which were intrusive and annoying,” Dean says. “This is also a pop-over ad, but you have no idea it’s actually sitting on top of what’s underneath it.”
The addressable offer illustrates how eager TV networks are to court a growing category of advertising. A phalanx of so-called “direct response” marketers, who rely heavily on digital outreach to court customers, is gaining new influence on the networks. Marketers including online retailers like Wayfair and Warby Parker; upstart marketers such as Casper; and new-tech outlets like Spotify have come of age online but need TV ads to increase consumer awareness of their offers. Even so, they are demanding a higher level of accountability from TV, because they get such granular tracing from their web-based marketing.
“There is a whole new set of advertisers out there who are national but have highly defined niche audiences,” says Dean. “Here is a way for us to not only work with our current advertisers more flexible, but to bring national TV to a whole new set of advertisers.”
The new ads also come with something else a media company wants: the chance to seek higher rates from advertisers.
The technology “allows national advertisers to do things they have probably never thought they could do with television,” says Geraci.
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