Addressable ad executive: ‘If I knew it would only be a $2B business by 2018, I wouldn’t have taken the job’

AT&T's addressable advertising business (AT&T)
Addressable ads make up a tiny fraction of the $70 billion U.S. TV advertising market. (AT&T)

SAN FRANCISCO —While most agreed that the technology is baked enough to support sizable addressable advertising and Dynamic Ad Insertion (DAI) markets in the U.S., a panel of leading industry experts also concurred that the current market, as it exists, is disappointingly small.

In fact, various estimates peg the total U.S. addressable market at only around $2 billion right now—a small fraction of the $70 billion U.S. TV ad market. 

“If you told me in 2003 that I’d be talking about a $2 billion business today, I wouldn’t have taken the job,” remarked Michael Kubin, executive VP of media for addressable services shop INVIDI. Speaking at the annual TV of Tomorrow conference on the old Presidio lot on Thursday, Kubin has been on the job since, well, 2003.

“For some reason, the media business takes forever to adopt new technologies and standards,” Kubin shrugged. 

First and foremost, the panel noted, programming networks are loath to give up inventory measured by Nielsen’s coin of the realm, the C3 rating. 

“One of the biggest hindrances to addressable is that national TV is completely tethered to their Nielsen ratings,” noted Peter Dolchin, head of telco and video distributor partnerships at Google. 

Nielsen currently doesn’t measure addressable ad delivery, a dynamic Kubin and several other executives said they’re working with the research company to change. 

Meanwhile, Jarred Wilchinsky, VP of video monetization and operations for CBS Interactive, noted that programmers and their advertising partners are still concerned about their ability to manage commercial pods.

“There are still massive technical issues to work out,” Wilchinsky said. Networks work carefully to manage pods—to make sure they’re the right time length, and also not “to put a Toyota spot next to a Ford commercial.”

‘The complexity of keeping a clean pod,” Wilchinsky said, still can’t be managed yet on an automated level. 

Wolchinsky also suggested that not every advertiser needs addressable. His example: makers of toilet paper, whose ads target everybody.