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Broadcasting & Cable
Broadcasting & Cable
Business
Jon Kaplan

TV’s Fragmented Landscape Has Made Reach Extension a Necessity (B+C Guest Blog)

Couple watching addressable advertising.
Madhive chief revenue officer Jon Kaplan (Image credit: Madhive)

For decades, advertisers loved linear television because it was a “mass reach” vehicle, with the ability to drive exposure with tens of millions of households during weekly tune-in events like Seinfeld, American Idol and Survivor. Now, those tune-in events primarily consist of sports and are nowhere near as big, besides the Super Bowl.

With broadcast and cable falling below 50% of total TV viewership this year, the entire industry is shifting focus to streaming. And as viewing behavior changes, advertising strategy must change with it.

As audiences splinter off from the traditional channels of the broadcast and cable era into multiple streaming environments and formats, how do advertisers reach digital audiences at scale?

Streaming Is Splintering

Netflix paved the way for the streaming revolution with its ad-free streaming service, which created a wake filled by an array of ad-supported business models. The resulting FAST services, like Pluto TV and Tubi, have grown rapidly with 50 million monthly active users and $1 billion in yearly revenue, something even leading industry analysts didn’t see coming.

What is more, historical SVOD players like Netflix are launching ad-supported tiers and even broadcasters have adapted by creating their own streaming platforms (hello Peacock, Paramount Plus, etc).

Broadcasters, advertisers and the industry at large are now battling both cord-cutting and the overall fragmentation of streaming applications available. To combat this issue, the entire industry is taking a page from the digital advertising playbook which, after all, is more reflective of the future of TV. Among the many powerful weapons in the digital advertising arsenal is the ability to offer precision-targeted audience reach extension.

Reach Beyond Boundaries

Reach extension, simply defined, is the ability to find more of a desired audience across all media. It allows media companies to offer advertisers the ability to reach viewers outside of owned inventory by identifying targeted users and extending the ability to reach them via other channels, platforms and environments.

Offering reach extension to TV advertisers is a powerful value proposition, especially for advertisers with access to a wealth of first-party data. For instance, advertisers can take first-party audience segments — like an existing customer list — and find those same people outside of a single media property. Alternatively, advertisers can extend a demographic segment they want to target (say auto buyers) from one streaming property to the rest of CTV.

Put into practice, this approach also extends way beyond the traditional TV stakeholders. A retail media network like Target’s Roundel can take its Red Card loyalty-program customers and reach them across a collection of premium media properties. A digital property like DoorDash can reach audiences beyond their mobile app by targeting people who have ordered from Chipotle in the last 30 days within streaming channels.

At a time when everyone is vying for eyeballs and attention, it’s impossible to achieve true scale within the confines of any single streaming service, but using that service as a starting point to reach that audience wherever they may live is a far greater opportunity. Not only does this generate more revenue for media companies, but it also makes the initial ad buy more attractive and productive for the advertiser.

While viewers may be moving away from traditional TV broadcast, premium publishers still hold the keys to digital audiences at scale — and the visionaries recognize the need to launch reach extension initiatives. The time to enter this game is now, where the future of TV advertising will be shaped by those willing to adapt and extend beyond their boundaries.

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