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Illustration: Axios Visuals

The hottest new trend in TV tech is "addressable" ads, or TV ads that can be targeted to specific households via user data. By the end of this year, almost every major TV network and provider will have rolled out their version of an addressable ad product.

Why it matters: It's a huge departure from the way TV ads have been bought and sold for decades. Struggling networks hope personalized ads will make the TV experience better for users who are ditching TV for ad-free streaming services like Netflix — and they're also drawn by the opportunity of a digital advertising market that isn't already controlled by Google and Facebook.

What's new: Traditionally, TV ads could only be bought and sold by gender and age — not demographics. This means that a cat lover could be served an ad for dog food, or a healthy person could get an ad for medicine. Addressable ads aim to make the messages more relevant.

Driving the news: Several big TV companies announced acquisitions or products this week that they think will make it easier for them to sell more addressable ads.

  • NBC says its new streaming service will create a lot of new addressable TV ad inventory. Hulu lowered the price of its ad-supported tier to be able to serve more addressable TV ads. Viacom acquired a digital ad-supported TV streaming company.

Here's how hot "addressable" is: AT&T says the ability to build an addressable ad product for its DirecTV and DirectTV Now customers was one of the driving factors in its decision to buy Time Warner last year for $85 billion.

"The advertisers that I talk to, they’re interested in taking a big leap into data, which means, we’re not buying 18-49, we’re not selling 25-54, we’re buying consumers who have shown the proclivity to be heavy purchasers of frozen entrees to a company like Conagra."
— Jon Steinlauf, chief U.S. advertising sales officer at Discovery, talking with Axios at the National Association of Television Program Executives event in Miami Wednesday

How it works: TV networks and providers (cable and satellite companies or digital TV companies like Hulu) are using data from set-top boxes (the boxes you get from your cable company with the blinking lights), combined with data from digital networks (produced as you browse the web), to target ads to you that you might like.

  • The beauty of these ads is that they tend to cost less because they reach a smaller, more targeted group of people.
  • Because of this, smaller businesses can afford to buy national TV ads for the first time, lowering the barrier of entry to TV marketing.
  • As a result, users may start seeing TV ads from brands that they would normally only see on social media, like Dollar Shave Club, as well as ads from legacy brands, like Target.

Be smart: The TV industry knows it needs to make ads more innovative so it doesn't continue to lose viewers to ad-free services, but the short-term business calculus isn't always attractive.

  • Addressable ads can be harder to sell at scale, because they have to be offered in smaller, more targeted increments.
  • This means that in the short term, it could be hard for networks to match their profits from selling more expensive ads that aren't customized, but reach a lot more people.
  • And for companies that have very general products, like toilet paper or toothpaste, broader ads may be more efficient to buy, anyway.

The bottom line: Personalized TV ads are the next big thing, but it will take some time before most TV ads are sold this way.

Go deeper:

Go deeper

Updated 4 hours ago - World

Skripal poisoning suspects linked to Czech blast, as country expels 18 Russians

Combined images released by British police in 2018 of Alexander Petrov (L) and Ruslan Boshirov, who are suspected of carrying out an attack in the in the southern English city of Salisbury using Novichok, a military-grade nerve agent, and also the2014 Czech depot explosion. Photo: Metropolitan Police via Getty Images

Czech police on Saturday connected two Russian men suspected of carrying out a poisoning attack in Salisbury, England, with a deadly ammunition depot explosion southeast of the capital, Prague, per Reuters.

Driving the news: Czech officials announced Saturday they're expelling 18 Russian diplomats they accuse of being involved in the blast in Vrbětice, AP notes. Czech police said later they're searching for two men carrying several passports — including two with the names Alexander Petrov and Ruslan Boshirov.

Indianapolis mass shooting suspect legally bought 2 guns, police say

Marion County Forensic Services vehicles are parked at the site of a mass shooting at a FedEx facility in Indianapolis, Indiana, on Friday. Photo: Jeff Dean/AFP via Getty Images

The suspected gunman in this week's mass shooting at a FedEx facility in Indianapolis legally purchased two "assault rifles" believed to have been used in the attack, police said late Saturday.

Of note: The Indianapolis Metropolitan Police Department's statement that Brandon Scott Hole, 19, bought the rifles last July and September comes a day after the FBI told news outlets that a "shotgun was seized" from the suspect in March 2020 after his mother raised concerns about his mental health.

U.S. and China agree to take joint climate action

US Special Presidential Envoy for Climate John Kerry waves as he arrives at the Elysee Presidential Palace on March 10, 2021 in Paris. Photo: Chesnot/Getty Images

Despite an increasingly tense relationship, the U.S. and China agreed Saturday to work together to tackle global climate change, including by "raising ambition" for emissions cuts during the 2020s — a key goal of the Biden administration.

Why it matters: The joint communique released Saturday evening commits the world's two largest emitters of greenhouse gases to work together to keep the most ambitious temperature target contained in the Paris Climate Agreement viable by potentially taking additional emissions cuts prior to 2030.