What is addressable advertising?
Definition, importance, benefits, and how it works
Addressable advertising allows marketers to deliver relevant messages to desired audiences based on available signals, regardless of the presence of ad identifiers like third-party cookies. This approach is key to reaching and gauging the effectiveness of online ad spaces, and in driving engagement and ad relevance.
Addressable advertising allows advertisers to deliver relevant messages to desired audiences based on available signals—regardless of the presence of ad identifiers like third-party cookies. This approach is key to reaching and gauging the effectiveness of online ad spaces, and in driving engagement and ad relevance.
In the past, addressability was mostly tied to ad identifiers’ unique, pseudonymous tokens used to deliver advertising messages—shared among publishers, advertisers, and other third parties—to understand consumer behaviors across online channels.
However, given recent industry trends on deprecating third-party cookies and mobile ad identifiers, addressable advertising has evolved to include methodologies such as signal-based marketing that hinge on available, in-the-moment signals to deliver impactful messages. Signals are defined as a wide range of consumer events and behaviors that are not restricted to ad identifiers, and that can provide information about consumer behavior in past or present context.
Addressable advertising is important because it delivers content that resonates with consumers’ interests and behaviors—despite any ad identifiers. This approach ensures that marketing efforts are not wasted on irrelevant audiences, optimizing the allocation of resources. Ultimately, addressable advertising cultivates stronger connections between brands and consumers, driving better results and ROI.
Connected TV (CTV) refers to any TV that can stream video by connecting to the internet, including external boxes and sticks, as well as smart TVs with built-in connectivity. CTV advertising offers an effective and innovative change to the linear TV advertising landscape by bringing digital capabilities, such as audience-first buying, to home screens.
Addressable CTV advertising extends the concept of addressability to this new environment. It’s the ability to deliver ad opportunities with relevant messaging in a connected TV environment based on available, in-the-moment, brand-safe signals—across all supply sources.
What is the difference between addressable and programmatic advertising?
Programmatic advertising is an automated approach to buying and selling digital advertising spaces. It uses algorithms and signals to make real-time decisions about ad placements, targeting, and bidding. Addressable advertising, on the other hand, goes beyond the buy-and-sell methodology by ensuring messages are relevant to specific audiences and enhancing engagement, regardless of whether or not ad identifiers are present.
The two concepts work together harmoniously. Programmatic advertising helps with the right placements and audiences for addressable ads. It can optimize ad delivery across various channels and devices, enhancing the marketing reach of addressable campaigns. In essence, it sets the stage for addressable ads to deliver their targeted messages to desired audiences at the right time, maximizing the effectiveness of both strategies.
Advertising addressability works by leveraging signals and technology to better serve ads. It starts with aggregating consumers insights, which includes preferences, behaviors, and demographics. These signals are then used to create durable reach, frequency, and measurement strategies for advertisers’ digital campaigns, which are delivered through various channels and devices.
Advertising addressability involves future-proof targeting strategies, relevant messaging, and strategic ad delivery to create meaningful connections with consumers and drive desired outcomes.
Benefits of advertising addressability
Advertising addressability brings a multitude of benefits to the forefront, reshaping the way advertisers engage with their audiences and measuring campaign impact.
Advertisers can recover audience addressability and get back in front of audiences who spend time on browsers and devices that no longer support third-party ad identifiers. This automatically increases the pool of audiences or supply that can be reached, helping fulfill campaign delivery and advertising budget requirements.
Addressable advertising also ensures that message relevancy meets ad opportunity, reducing ad waste and building deeper connections between brands and consumers. This resonant messaging not only enhances engagement but can also contribute to brand loyalty.
Advertisers can better understand engagement and conversion rate by studying the changes that occur as a result of ads served, and can use this knowledge to further optimize their campaigns and make smarter decisions to better reach consumers across major touchpoints. This includes optimizing resources by focusing efforts on audiences that are more likely to convert, which can ultimately can lead to a higher return on ad spend (ROAS).
Addressability takes various forms, such as first-party signals, modeling, and contextual targeting.
First-party signals are the gold standard for advertisers, as it allows them to bring their direct relationship with consumers to the digital advertising world. Also, first-party signals aren’t contingent upon changes made by web browsers or device manufacturers, and they can be combined with signals from adtech providers to further extend reach.
Modeling empowers advertisers to expand campaign reach to audiences that don’t have advertising identifiers but are likely to drive the desired outcome. This translates into less reliance on past events and behavior, and more focus on present and potential future events.
- Amazon Audiences now considers a variety of new signals so you can reach more consumers who express the interests and behaviors relevant to your business goals. Using Amazon insights and machine learning, you are able to expand campaign reach to audiences that don’t have ad identifiers.
Contextual targeting allows advertisers to reach consumers based on the content that’s being consumed in the moment, in ways that’s contextually relevant or affinity-related. That applies equally to content viewers are consuming on their laptops, phones, or TVs.
- A CPG company that activated Amazon DSP Contextual Targeting saw a 65% increase when reaching previously non-addressable audiences (or audiences who did not have mobile ad identifiers or third-party cookies), contributing to a 20x ROAS.
Signal-based marketing is our approach to helping advertisers deliver relevant messages at relevant times, without a reliance on third-party cookies. It combines our exclusive signals with the power of machine learning to create relevancy between consumer and message.
As Neal Richter, director of bidding science and engineering at Amazon Ads, recently wrote in AdExchanger: “Cookies are … false precision. Signal-based marketing, by contrast, allows advertisers using Amazon DSP to engage consumers with relevant, useful advertising, as opposed to repeatedly showing them an ad for a product they had considered and not purchased.”1
Addressable media refers to the deliveries of relevant messages to desired audiences based on their characteristics, as well as past or current behaviors, enhancing ad relevance and engagement.
In TV advertising, linear advertising refers to traditional broadcast or cable TV advertising, where ads are shown in a predetermined sequence during scheduled programming.
Marketing signals encompass a wide range of consumer events and behaviors that provide insights into their current or past preferences, behaviors, and interests, aiding in creating more effective and relevant marketing strategies.
Ad serving is the process of delivering ads to display on websites, apps, or other digital platforms for consumers. It includes the management, tracking, and optimization of ad placements to ensure effective reach and engagement.
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