Roughly half of the 120M TV households in the U.S. have the technology to receive addressable ads.
National TV ad spend share by targeting type according to eMarketer:
1) Age/Gender — 95%
2) Advanced TV/Audience — ≈ 3%
3) Addressable — 2%
Big question: If ≈ 50% of U.S. TV households can receive addressable advertising, then why does it make up only 2% of TV ad revenue?
The short answer is that it is due to the complexity of the TV ecosystem itself, which pay-TV providers understand. The challenge is what to do about it.
Quote from Marcien Jenckes– President, Advertising @ Comcast Cable:
“The biggest challenge to television as a platform is the various players within television…If we don’t kind of set aside our differences and our territorial rivalries, somebody else is going to come along and eat our lunch. Period. Full stop. No question about it.”
Flashback #1: AT&T Boss Writes Script for HBO: More Data, More Money
If AT&T offers addressable advertising AND owns the networks the following could occur:
1) Ad pricing — A single ad impression increases 192% from 1.2¢ to 3.5¢ due to improved targeting.
2) Inventory — The number of 30s spots available to AT&T increases 600% from 4 to 28 now that they are both the cable provider and content owner.
3) Total impact — AT&T currently makes roughly $0.05 per hour (4 spots x 1.2¢), but that could increase to $0.98 per hour (28 spots x 3.5¢) if they accomplish #1 and #2.