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The days when a viewer sees a TV commercial that seems irrelevant may be coming to an end, as advertising tailored to a person or audience grows in popularity with marketers.
In the U.S., advertisers are expected to spend $1.26 billion on this type of targeted commercial in 2017, with that figure increasing to $3.04 billion in 2019, according to estimates by researcher eMarketer.
So-called "addressable" TV advertising has been growing slowly over the past couple of years but is projected to make up 4 percent of TV spend in 2019, up from 0.6 percent in 2015.
It is gaining in popularity because of the ability to understand the return on investment for TV ad spend, something that has traditionally been hard to measure.
"This additional addressable advertising layer means that ads reach in-target households more frequently, thereby reducing wasted ad impressions and improving the overall advertising impact," eMarketer's report stated.
However, the cost of addressable ads is higher than standard TV advertising, which is a barrier to entry according to almost 50 percent of marketers surveyed by AT&T and researcher Advertiser Perceptions in March 2017.
In the U.K., broadcast channels Sky and Virgin Media have announced an addressable TV partnership whereby Virgin would be able to use Sky's targeted AdSmart technology, with marketers or their media agencies able to purchase airtime across both channels through a one-stop buying point.
The two claimed that advertisers would "be able to target a potential audience over time of more than 30 million viewers, putting it on a par with leading social networks," in an online release in June 2017.
U.S. TV networks are having a tough time right now, with six of the largest U.S. pay TV providers posting subscriber losses during the past quarter, as more people watch shows via the internet. Netflix added 5.2 million subscribers in the second quarter, beating Wall Street expectations.
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