What is addressability and why a known audience is important?

What is addressability and why a known audience is important?
Ben Cicchetti
Tuesday, April 7, 2020

Marketing only works if you have access to an audience. The most innovative and creative advertising campaigns mean nothing if no one sees them. At a very basic level, this is what an addressable audience is - the individuals who can be targeted and potentially see your marketing activity. 

Early addressable audiences were ‘offline’ and included direct mail and print ads in magazines/newspapers. These addressable audiences were provided by either the holders of postal address data, such as the UK’s Royal Mail and the US Postal Service or through magazine and newspaper subscription models. In the 90s, the internet explosion made email marketing an increasingly popular method of reaching people. These email distribution lists were the first ‘online’ audiences in the new digital age. 

However, as our online lives evolved in the 00s, so too did digital marketing efforts. With ever-increasing ease of access and the rapid growth of social media platforms, digital advertising became the dominant force in the marketer’s handbook. By the time we moved into this decade, 53.6% of ad spend went to digital advertising

By the time we moved into this decade, 53.6% of ad spend went to digital advertising

As we consume more and more content through various devices, individual users were turned into an addressable audience through the use of small text files containing a unique ID stored on a user’s internet browsers - the now-infamous cookie. 

The potential for these cookie-based audiences led to a boom in the adtech industry. Various vendors came to market with technology that would place their own cookie - known as a third-party cookie - on each individual’s browser and build larger and larger addressable audiences. The first challenge for media owners was that because the adtech vendor owned the cookie, they owned the relationship to the addressable audience. 

Another challenge was that this audience was largely ‘unknown’, meaning there was little declared (i.e log in) data about the individuals associated with the third-party cookie. The final challenge was the quality of the audience. It could often have low fidelity as the same individual using different devices, for example, home and work computer, would be counted multiple times and assumed to be multiple different individuals as third-party cookies had no way of natively identifying a person between devices.

Challenges for media owners

The move to known addressable audiences

With approximately 80% of all advertising spend flowing their way, the walled gardens (Facebook and Google) provided the example that the rest of the advertising industry should follow to achieve success - known addressable audiences (sometimes known as people-based marketing). 

Let’s take Facebook as an example. Because users are required to login to their Facebook account across each device they want to access it from, Facebook has an extensive identity graph - meaning they recognise individuals across any device and can target them with people-based (i.e. de-duplicated audience) marketing activity. 

Media owners have the opportunity to replicate this success with their own audiences and have the advantage of additionally holding some much richer customer data than the walled gardens. Some media companies are already demonstrating this. Broadcasters, for example, are building large known addressable audiences through their on-demand services delivered through OTT and CTV devices. Music streaming services such as Spotify and Pandora are doing the same (we take a deeper look into these examples here).

Media owners hold much richer customer data than the walled gardens

But for online publishers, the journey to build these known addressable audiences has already started in earnest since Google announced it’s intentions to deprecate 3rd party cookies from the Chrome browser in November last year. Increasingly we’re seeing online publishers now encouraging their readers to sign up for premium content. As we discussed at a recent publisher breakfast, Telegraph Media Group has set a goal to increase their subscribes to 1 million by 2023 and to have 10 million registered users, in order to provide them with a larger known addressable audience that they can take to brands to activate against. 

Publishers across the board need to start building their known addressable audiences. Why is this so important in 2020? That’s the topic of next week's blog when we examine how media owners can future-proof their business through addressability. 

If you haven’t already, subscribe to hear when the blog goes live. 

Visit our Addressability page to explore this topic further, including the journey from unknown to known, the benefits it brings and InfoSum’s approach. 

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