A Postcard from Programmatic Adland

A brief exploration of programmatic advertising in the UK, with a focus on video. Where is the industry now, what has shaped this, and where might it go next.

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Programmatic Advertising

Programmatic advertising is the application of data and technology to a workflow. This process consists of five parts: [1] audience [2] planning, forecasting and order [3] activation and media buy [4] optimisation [5] reporting and measurement. It covers multiple media channels, including video [I’m using video as a synonym for TV], audio, display, and social. The following discussion focuses on video.

The Enabler

The transition of video from linear feeds to IPTV has facilitated a transformation in content delivery, viewing behaviour, and subsequently advertising. This is widely evident, most recent examples include the launch of Freely and the drive of a satellite broadcaster to migrate customers to internet devices. At some point soon all content, both editorial and commercial, will be delivered over the internet.

Programmatic Advertising

All commercial video media owners and resellers, spanning FAST, AVOD, BVOD, and SVOD, claim to be programmatic. This is correct to an extent, as aspects of their workflow will be characterised by data and technology. Customer data is used to build addressable audience segments, insertion orders are made via platform UIs, and tech integrations enable RTB and the secure exchange of data.

Programmatic Patchwork

As with much of contemporary video, programmatic is beleaguered by fragmentation and idiosyncrasy, often a result of diverse histories, current commercial anxieties and spread betting on the future. This in the face of a market that increasingly demands standardisation, consolidation and the free, albeit secure, exchange of data. It’s not that media owners aren’t engaging with programmatic, more that the approach has been siloed and at varying velocities.

For example, brands and media buyers might understandably feel aggrieved at not receiving exposure data from some platforms in a format that enables holistic planning and measurement. Arguably they own this data, having paid for it.

There's a dichotomy between AVOD, where a progressive commitment to programmatic exists, and the entrenched piecemeal behaviour of BVOD. Which route will the SVOD platforms take?

BARB, SOCI & Share Deals

It’s not a racket, more of an establishment. The vast amount of video ad spend in the UK is traded to three sales houses, based on the share of commercial viewing, as reported by a panel of 5,100 homes and 11,500 people. That’s not conjecture, just a fact. Spend commitments exist outside the big three but are negotiated in an entirely different manner.

Given annual or biannual deals secure vast sums of video ad spend upfront, this could well explain the strategic move of SVOD platforms to have not only their content, but commercial viewing, measured by the industry Gold Standard.

Given there’s a finite audience, with a finite number of hours to consume video, the SOCI pie might have to be shared amongst more diners. Broadcasters might need a smaller spoon. Although this version of the future could prove challenging for video platforms sitting outside the BARB fraternity. They could be reliant on the remaining investment available once deals have been delivered.

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Give the People What They Want

By people, we mean brands, or customers. It’s slightly remarkable a market exists where the consumer [client] purchases a product [video media] but only receives part of what they paid for. One thing they most definitely want is a holistic view of their video media performance, which at its most hygienic level, is deduped reach and frequency. Data and tech can empower ad products, such as attribution, but getting the house in order should be priority.

Of a defined segment and across all buy points, how much of that audience has been uniquely reached, and how many times. But it seems optimal buying and the common-sense management of frequency [protecting user experience and enhancing engagement] is not necessarily in the interests of maintaining the status quo. There’s often a void between what can, and is, being offered.

Exposing the performance of audience reach and incrementality by respective media owner, could expose the possible folly of solely apportioning investment relative to viewing volume. We are increasingly operating in a world where audiences are defined by dynamic, data driven segments, moving farther afield from broad, homogeneous groups. SOCI enables the big players to stymy and dictate how pioneering programmatic might become, and at what pace.

An Incubator Project

Putting aside SOCI investment, affectionately referred to as ‘traditional linear spend’, the industry should focus on aligning the FAST, AVOD, BVOD and SVOD markets. This should appease the broadcasters, given BVODs relatively speaking minor, although ever growing, share of total revenue, while endearing them to customers and partners, as they bid to shape and secure video’s future.

Such a project might include explorations in:

1.????? Agreeing a common impression standard.

2.????? Making APIs available for audience planning, inventory forecasting, reporting and measurement.

3.????? Flexibility in format and sharing of exposure data [hashed IDs]. That’s one of the main reasons clean rooms exist.

4.????? Cross platform frequency management, unique and incremental reach.

5.????? Consolidated buying platform, or proprietary platforms that support modular and flexible integrations, for holistic planning and buying.

6.????? DSP integrations, making available entire inventory sets and audiences, with real-time, devolved ad execution [even if within a PG framework, to manage price, and inventory supply and demand].