NextGen TV is the future of TV — that’s what all the buzzy headlines say. The new technology, ATSC 3.0, does a lot for viewers, providing improved video and audio. It’s a hybrid broadcast and IP-based delivery standard. It’s a substantial upgrade for the user experience, and it has benefits for broadcast advertising as well.
NextGen TV represents a new revenue stream, and it’s one that expands your O&O (owned and operated) inventory. What that translates to for you is the ability to offer new ad spots with targeting capabilities that surpass traditional TV and enable you to reach cord-cutters.
So, what’s the opportunity with NextGen TV targeting?
First-Party Data Is Easier to Capture
The death of third-party cookies and the need to transition to first-party have been on the minds of media sellers and buyers. Google did delay (again) its removal of these until 2024. However, you still need to make plans to leverage first-party data for existing and future advertisers. NextGen TV is the perfect solution.
The collection of first-party data happens with an ATSC 3.0-compatible device. With such a device, a dedicated return channel (DRC) sends data back to the TV broadcaster. It includes what content played during specific times. The intel you garner is what is broadcast when and to what devices. That builds the path to smarter targeting.
The Power of NextGen TV Targeting
With NextGen TV, you combine first-party data with geotargeting. It consists of data points around nearby targeting, previous click history, viewing habits and real-time information. You then know who watches what, which delivers key segmenting your advertisers will find attractive. They’ll have the same targeting approach they may only have access to through specific digital tactics now. It opens the door for addressable TV.
Building an Audience for Advertisers
With this new capability comes the ability to build audiences for advertisers. With broadcast spots, you place ads in programming that may include your advertiser’s customers. NextGen TV targeting takes a lot of assumptions or intuition out of the mix, depending more on data.
Precise targeting enables you to build a customer profile based on usage and demographics. As a result, advertisers could see less ad waste and better ROAS (return on ad spend).
Creative and Content at the One-to-One Level
NextGen TV allows for dynamic ad insertion based on the data from that household. An ad campaign may have a central story with numerous targeted spots. The metadata about the viewing habits determines which version they see — ideally, the one most curated for their preferences.
This targeting also positions advertisers to get back in front of cord-cutters.
Targeting Lets You Reach Cord-Cutters
Cord-cutting is gaining popularity. More people are streaming than watching broadcast TV. In the last decade, pay-TV lost 25 million subscribers. Another 25 million are expected to follow suit by 2025. The migration isn’t just to ad-free platforms. Many streamers are fine with ad-supported options. Additionally, live TV streaming is growing with YouTube TV, Hulu Live and Sling TV.
These trends indicate consumers aren’t saying no to ads. Rather, they want more flexibility in how they consume TV at a lower price point. In most cases, cord-cutters trend younger, and that demographic is likely one your advertisers have difficulty reaching with broadcast spots.
NextGen TV Targeting: Consumer Adoption Is Coming; Be Ready
ATSC 3.0 has deployed to cover about 80% of the public in the U.S. While stations upgraded, consumer adoption of NextGen TV devices is slow and the biggest barrier to media companies garnering revenue.
Sony, LG and Samsung have models on the market with more to come. Cost is going down, too. According to the Consumer Technology Association, NextGen TV devices only have a penetration of 2.9% in the U.S. They expect that to hit 26.2% by 2025 and 55.4% by 2027. While those dates are years away, being in a position to grow ad revenue sooner rather than later will pay off.
Get more insights on NextGen TV targeting and opportunities. Download our white paper, How NextGen TV Is Powering the Future of Local TV Advertising.