Programmatic TV Update

Programmatic TV Update

The $70 billion television advertising business is finally poised to change!

Programmatic TV give marketers and agencies an efficient and impartial purchasing platform that can replace current TV buying practices. It has the capability to combine linear, digital and social purchases using advanced data-driven metrics that are tied to brand performance and response.

Following the path of programmatic desktop, social and mobile purchases, clients and agencies are testing programmatic TV in earnest. Improving technology has the potential to maximize broadcasters inventory, which will lead to amplified revenue, more effectively measure campaign results, reduce agency staffing and for many companies, efficiently shift media purchasing in-house.

Only a small portion of the technology needed is ready today but given recent technology advances, it’s sure to be here in the next few years. For those who have seen the IBM Watson commercials, it’s not hard to imagine how data can change the marketing industry permanently.

Nine Programmatic Thoughts

Will lead to better targeting/less waste - Instead of purchasing media against traditional demographic ratings, programmatic technology can use audience data to place advertising within optimal programming, whether this be in traditional linear TV, OTT or other delivery. Specific data can be used such as consumers who not only earn $100K in income, but who own specific phones or other devices, watch certain programs on linear TV and then use their smartphone to engage in social media at the same time. To manage all this data requires a high degree of automation.
Will expose brands to new programming - Upfront deals, proliferation of video opportunities and buyer prerogatives make it hard to expose brands to new programming that have proper demographics and pricing. Many smaller networks don’t have the opportunity to present themselves to agencies and clients. Programmatic eliminates all these bias by aligning brand messaging with targeted consumers, in whatever format is available.
Will allow for more and better data - As everyone getting ready for the upfront can tell you, data is the hot topic. No one on the client side wants to purchase a simple demographic. Programmatic will allow a much more robust and data driven buy.
Has already seen success - Spot TV is already benefiting from this technology. Cox, AT&T and Comcast have seen significant increases from programmatic purchases. The local marketplace has made the change much more quickly. The local stations have supplied enough inventory to make a viable marketplace for marketers.
Can help deliver impressions to apps and streaming media - This subcategory has significant potential but it’s still a very small market. Generally, “connected TV’ refers to advertising delivered to TV apps - sometimes that includes ads within full episodes of shows, while in other cases these are ads delivered within the digital menus of various individual apps.
Can assist with consumer fragmentation - Today’s advertisers are plagued with separate technology solutions to manage different aspects of advertising across channels, audiences, and data sets. A single programmatic buying platform would provide a united solution for all of their ad buying. In the near future, programmers and distributors will be able to sell their linear TV ad inventories in conjunction with their digital inventories.
Can lead to better measurement - All these platforms require accurate third-party measurement, and Nielsen is trying to meet that demand through its ongoing development of a Total Audience Measurement system. The TAM methodology will incorporate viewing on both traditional TV and digital/VOD. Some streaming video clients, such as CBS All Access, are already using it to track tune-in across digital, social and mobile.
What’s holding Programmatic growth - Programmatic buying works well on digital platforms, where supply is bountiful and buyers have significant options. The same is not true on TV. Supply is more limited especially when premium programs are sought after. Sellers have traditionally asked for and received long term commitments which limits inventory. Networks with significant sports inventory aren’t motivated to change the way they sell in the current environment. Smaller networks with a lot of un-sold inventory will adopt much faster.
Addressable TV - Using set-top box data from cable companies such as ATT Adworks and Cox, advertisers can deliver ads only to households that are likely to be in the market for a specific product or service. Marketers are engaging with the technology and should see significant growth in 2016/17.
Summary

Programmatic TV/video is not fully ready to roll today. But it’s coming and like all new technology introduced in the past few years, it’s coming quickly. Testing and research is needed to lay a roadmap as new layers of technology are added. Applying a more data driven, efficient buying platform that links linear TV, video, social media and apps on a single platform with unified ratings, should be the goal. More to come….