Addressable TV Advertising: What Is It & How Does It Work?

Advertising, Connected TV

With so many entertainment possibilities out there, the battle for attention has never been as intense as it is now. But the good news is that there are ways to cut through the clutter and find the engaged viewership your brand seeks. One of the foundations of reaching your key audiences on the high-impact TV screen is addressable TV. 

Addressable TV advertising goes beyond the contextual targeting of traditional television advertising to reach a brand’s specific target audience, no matter what content they are watching. But, what is it and how does it work? Let’s discuss.

What is Addressable TV Advertising?

Addressable TV advertising is a type of targeted advertising that enables advertisers to customize the ads delivered to individual households while they are watching television. It uses sophisticated data analytics and digital technology to segment audiences based on various factors such as demographics, behavior, or geographical location.

Addressable TV originally came from pay-TV providers (like Comcast, DirecTV, and Dish), who used set-top box data to deliver different ads to different households. At the time, it did not encompass streaming TV. It was considered “addressable” because it could target the household level even though it ran on linear broadcast infrastructure.

However, the definition of “addressability” has evolved over time to include streaming, OTT, and Connected TV (CTV) environments. So, to clarify, addressable TV is a targeting capability that can exist across both traditional and streaming distribution.

Benefits of Addressable TV Ads

Addressable TV advertising offers several key benefits, including:

• Highly Targeted Advertising: Addressable TV enables precise targeting of specific households based on demographics and viewing habits, ensuring ads are more relevant and engaging to each viewer.
• Enhanced ROI: By focusing on audiences most likely to respond, addressable TV advertising improves ROI and ensures more efficient use of ad budgets.
• Measurable Impact: Allows for accurate tracking of viewer engagement and ad performance, facilitating data-driven decisions and campaign adjustments in real time.
• Brand-Safe Delivery: Premium inventory controls where your ads appear, protecting brand equity while improving view-through and conversion rates.
• Omnichannel Alignment: It offers seamless integration with digital campaigns for a cohesive marketing strategy.

How Does Addressable TV Advertising Work?

Addressable TV advertising leverages advanced technologies and data analysis to deliver targeted ads to specific audience groups. The process involves several key steps:

• Data Collection: Data is gathered from various sources, such as cable or satellite set-top boxes, third-party data providers, direct subscriber information, and CRMs.
• Audience Segmentation: Using the collected data, the audience is divided into distinct segments based on factors like age, gender, location, income level, lifestyle, and viewing habits.
• Ad Creation: Advertisers create personalized advertisements specifically tailored to appeal to these distinct audience segments.
• Ad Delivery: These personalized ads are then broadcast to the relevant audience segment using sophisticated ad delivery systems. When a viewer turns on their TV, the system determines which ad is most appropriate for that specific viewer or household.
• Feedback and Analysis: The performance of the ad is tracked and analyzed to measure its effectiveness. This feedback is then used to refine the audience segments and improve future ad targeting.

With addressable TV, different households may be watching the same show while being served completely different ads based on their unique interests. It removes the guesswork that was endemic to advertising in the past, in which you hoped that if someone were watching Seinfeld, for example, they’d be interested in your product. 

Addressable TV advertising recognizes that households may have similar tastes in programming but completely different needs as consumers. In short, it’s a more targeted and sophisticated way to reach consumers where they are.

Addressable TV vs. Linear TV

Linear TV refers to the old-fashioned, traditional broadcast model, in which you watch a show at the time when it’s broadcast, on the network that’s airing it. It’s not streamed to viewers on demand, and it generally caters to primetime viewing (often defined as 8-11 pm on weeknights), the time when most viewers are in front of their TVs.

While some viewers have stuck with linear TV, many more are cutting the cord and moving to CTV. Streaming viewership has firmly surpassed linear TV, accounting for 46% of total TV usage in mid-2025, while linear TV’s share (broadcast and cable combined) has dropped to historic lows around 44.2%, with ad spend expected to follow suit.

Linear TV has a multitude of disadvantages for advertisers in the current television advertising landscape, such as: 

• It has limited targeting capabilities, relying on contextual alignment rather than sophisticated means to reach an audience, no matter what content they are watching.
• It is often a long, inconvenient, and expensive process to get your ad placed.
• It cannot be optimized to performance goals, and there is limited reporting to evaluate the results.

Addressable TV vs. OTT

Over-the-top (OTT) advertising involves content that viewers access beyond the usual means of delivery–that is, over the top of traditional cable and broadcast TV providers. 

When used together with OTT, addressable TV turns your smart TV into a precisely targeted digital marketing powerhouse, making use of all the data-rich capabilities of the internet. Additionally, ads are typically non-skippable, which is an important plus in this click-happy, short-attention-span era.

Addressable TV vs. CTV

OTT and CTV are often used interchangeably. A technical distinction is that OTT refers to the technology of delivering content via the internet, while CTV is the internet-connected device that a viewer consumes content on (usually smart TVs).

Here, too, addressable TV uses CTV’s capabilities. For example, you can use tens of thousands of unique segments to build your audience profile, making it a powerful and sophisticated way to reach the right viewers for your product or service.

Is Addressable TV Programmatic?

Yes, addressable TV is transacted programmatically. Programmatic advertising, in this context, refers to tech-driven, automated methods of selling ads so they are appropriately paired with content. Programmatic TV uses data and AI tools to make split-second decisions about pairing ads and content so that advertisers get the biggest bang for their buck. 

Addressable TV is a form of programmatic TV and a subset of this ever-growing and crucially important industry.

How Much Does Addressable TV Cost?

Costs vary widely between campaigns, but efficiency gains often outweigh premiums. Precise delivery lowers effective CPMs by reducing wasted impressions, while performance optimization stretches budgets further.

However, here are a few cost drivers to consider before launching your addressable advertising campaign:

• Audience Precision: The narrower and more specific your targeting (e.g., income bracket, purchase intent, or CRM match), the higher the CPM.
• Inventory Quality: Premium, brand-safe placements on major streaming networks cost more but deliver stronger engagement and performance.
• Seasonality and Demand: Ad inventory prices climb during peak retail or cultural moments (think holidays, sports seasons, election cycles) when viewer engagement and competition both spike.
• Campaign Scale and Duration: Longer, higher-volume campaigns benefit from efficiency gains, while shorter or niche tests often carry higher costs per-impression.
• Creative Complexity: Dynamic or data-driven creatives that tailor messaging to audience segments increase impact, but also add to production and delivery costs.

Why Performance TV Is King

Want the precision of addressable TV with the impact of premium streaming? MNTN’s platform lets you target high-intent audiences, optimize in real time, and measure performance with complete transparency. No wasted spend—just smarter, data-driven campaigns that drive real results.

Here’s what you get with MNTN Performance TV:

• MNTN Matched – AI-powered targeting ensures your ads reach the right audience at the right time, maximizing relevance and engagement.
• Verified Visits™ Attribution – Tracks site visits and conversions tied directly to ad exposure, giving you clear, actionable performance insights.
• Premium CTV Inventory – Get guaranteed placement on top-tier streaming networks, so your brand appears where your audience is already watching.
• Automated Optimization – AI continuously refines your campaign in the background, improving efficiency and performance without manual adjustments.
• Integrations and APIs – Seamlessly connect your streaming TV advertising campaigns to your marketing stack, ensuring accurate attribution across platforms.

Take control of your addressable TV strategy with MNTN’s self-serve software—sign up today to get started.

Addressable TV Advertising: Final Thoughts

Addressable TV takes full advantage of recent technological advancements. Now, you can benefit from the high-impact nature of the TV screen, with the digital capabilities and reporting of CTV’s digital roots.