The head of GroupM’s advanced television unit foresees a shortage of addressable TV advertising inventory unless some big networks begin to offer national avails to augment the traditional two minutes of local time. MODI Media President Mike Bologna says five or six top cable and broadcast networks “are engaged in serious conversations with MVPD’s to honestly bring a national solution to addressability.”
In addition to revising carriage agreements, “They’re going to have a lot to work out,” Bologna says in an interview with Beet.TV. Issues include technology, business models and infrastructure economics. “But they will get there,” he adds. “Both parties seem to be ready, able and willing to at least begin the conversation seriously.”
With newer entrants like Charter and Verizon boosting overall addressable penetration north of 60 million homes, “There’s more and more clients involved than ever before in this space,” Bologna says. “We continue to have a repeat base of clients on addressable campaigns at over 90 percent.”
While noting that addressable advertising isn’t for every marketer, only about one-third of the plans MODI writes result in the recommendation that a client is “better off buying nationally and absorbing the waste and taking advantage of the much lower cost per thousand,” Bologna notes.
“Generally when you’re talking about an advertiser with a smaller segment, a more expensive product or service, they generate the most value out of addressability,” he says. “They continue to come back because they’re seeing that it’s generating sales and we’re seeing a positive return on investment.
The addition of national avails would enhance frequency as opposed to expanding reach.
“With only two minutes per hour and with all the new advertisers coming on, the demand will eventually outweigh the supply,” even if the addressable footprint expands to 75 million households, Bologna says. “But without the inclusion of national inventory and the influx of all these incremental advertisers, we’re going to need supply. And that supply can only come from one place, and that’s the national avail.”
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