The television advertising business is poised for a change. Following the path of digital advertising, the television industry is now slowly moving towards programmatic technologies. However, the television ad ecosystem is far different than digital medium, so programmatic advertising — effectively, data-driven automation of advertising transactions — will take a different shape for the older medium.
Television is undergoing tremendous technological developments, which will enable marketers to direct brand messages to more specific audiences at the individual and/or household level. Traditional ways of buying TV advertising are being challenged by the programmatic approach, which originated with search and display ads and uses data and technology and real-time auctions to automate transactions between buyers and sellers.
TV advertising is a big business in India! With over 197 million households accessing traditional TV subscriptions, it’s no surprise advertisers are willing to shell out upwards of INR 19500 Cr. (as per Madison pitch report 2017) each year for ads. It’s also a fairly predictable process since the traditional TV buying and selling model hasn’t changed in decades—until now.
What is Programmatic Advertising in TV Industry?
TV advertising is a big business in India! With over 197 million households accessing traditional TV subscriptions, it’s no surprise advertisers are willing to shell out upwards of INR 19500 Cr. (as per Madison pitch report 2017) each year for ads. It’s also a fairly predictable process since the traditional TV buying and selling model hasn’t changed in decades—until now.
What is Programmatic Advertising in TV Industry?
Programmatic TV is poised to transform the way TV is bought and sold. In simple terms, Programmatic advertising on TV is an automated process for buying TV ads combined with data-driven technology to target consumers at the individual household level. It stands for an automated and data-driven approach to buying and delivering ads against video content on television, including ads served across the web, mobile devices, and connected TVs, as well as linear TV ads served across set-top boxes.
Traditionally, TV ads are bought manually through upfronts, requiring emailed or faxed requests for proposals, insertion orders, and trafficking. Programmatic TV applies instantaneous efficiency models from digital advertising to TV ads served across devices, as well as linear TV ads served across over-the-top (OTT) boxes.
Beyond efficiencies for advertisers and media networks, programmatic TV has the potential to be a win for brands and their consumers. Advertisers will be able to target viewers with ads specifically tailored to their interests, cutting out the noise from universally friendly or irrelevant ads. Here’s a quick look into what the programmatic TV marketplace looks like today and how it will rise in the years to come.
The specificity of programmatic TV has the potential to be a big win for audiences, advertisers and the television industry. Traditional TV measurement mechanisms are inefficient and becoming more and more irrelevant. However, it requires a huge change in mindset to move away from the decades-old system. Instead of siloed TV spend, Programmatic TV could now be part of the overall digital spend and help target the right end users more efficiently, allowing advertisers to combine the advantages of mobile with the reach of TV. The whole purchase funnel is also being driven by new smart devices. For example, if a user has Amazon Fire TV and/or Echo then it’s a high probability that they’re also Amazon shoppers. Programmatic TV also opens up several new layers of targeting including set-top device level, app level and show level targeting.
Traditionally, TV ads are bought manually through upfronts, requiring emailed or faxed requests for proposals, insertion orders, and trafficking. Programmatic TV applies instantaneous efficiency models from digital advertising to TV ads served across devices, as well as linear TV ads served across over-the-top (OTT) boxes.
Beyond efficiencies for advertisers and media networks, programmatic TV has the potential to be a win for brands and their consumers. Advertisers will be able to target viewers with ads specifically tailored to their interests, cutting out the noise from universally friendly or irrelevant ads. Here’s a quick look into what the programmatic TV marketplace looks like today and how it will rise in the years to come.
The specificity of programmatic TV has the potential to be a big win for audiences, advertisers and the television industry. Traditional TV measurement mechanisms are inefficient and becoming more and more irrelevant. However, it requires a huge change in mindset to move away from the decades-old system. Instead of siloed TV spend, Programmatic TV could now be part of the overall digital spend and help target the right end users more efficiently, allowing advertisers to combine the advantages of mobile with the reach of TV. The whole purchase funnel is also being driven by new smart devices. For example, if a user has Amazon Fire TV and/or Echo then it’s a high probability that they’re also Amazon shoppers. Programmatic TV also opens up several new layers of targeting including set-top device level, app level and show level targeting.
TV networks and cable operators have since long voiced that a lot of TV inventory is undervalued, and what better audience targeting will help revitalize its value. Although, some inventory vendors worry that programmatic might commoditize and further devalue their inventory. Larger networks with a robust business aren’t too keen on changing the way they sell. Smaller television networks with a lot of inventory to sell will embrace programmatic a lot faster than a network.
What falls under the term - Programmatic TV?
What falls under the term - Programmatic TV?
Well, there is already a fair amount of complexity within this area, beginning with what “programmatic TV” actually refers to. In simple terms, any TV inventory that can be bought via a programmatic platform falls under this definition.
Within this quite broad category, however, there are several types. First of all, in terms of the content itself there is:
Within this quite broad category, however, there are several types. First of all, in terms of the content itself there is:
Video on Demand (VOD): TV that isn’t live, basically, such as Netflix, Amazon Prime etc. This may refer to content you watch on a smart TV using an app, or on a laptop, tablet or phone.
Digital linear TV: Sling TV was the first to create a live TV service streamed via the internet in 2015, but others have followed suit since.
Video: YouTube is the obvious pioneer in this category. As Facebook rolls out Watch, the distinction between video and TV content is starting to blur, but for the time being, it seems worth being made.
Digital linear TV: Sling TV was the first to create a live TV service streamed via the internet in 2015, but others have followed suit since.
Video: YouTube is the obvious pioneer in this category. As Facebook rolls out Watch, the distinction between video and TV content is starting to blur, but for the time being, it seems worth being made.
And in the near future, there may be a fourth type of inventory:
Terrestrial linear: As soon as traditional broadcasters develop the technological means (and many are currently trying), there may come a time when the most expensive and prestigious media inventory is available on the open exchange, or at least via a programmatic platform.
There also seem to be at least two synonyms for programmatic TV: “addressable” and “targetable,” the latter of which may incorporate terrestrial TV inventory purchased up front, but with far more granular targeting than the traditional method.
Lastly, there are the two different ways of purchasing programmatic TV inventory:
Terrestrial linear: As soon as traditional broadcasters develop the technological means (and many are currently trying), there may come a time when the most expensive and prestigious media inventory is available on the open exchange, or at least via a programmatic platform.
There also seem to be at least two synonyms for programmatic TV: “addressable” and “targetable,” the latter of which may incorporate terrestrial TV inventory purchased up front, but with far more granular targeting than the traditional method.
Lastly, there are the two different ways of purchasing programmatic TV inventory:
Open exchange: The big communal pool that just about anyone can access, using real-time bidding to auction inventory to the highest bidder.
Private marketplace: aka “programmatic direct/guaranteed/premium,” which is up front, but based on impressions rather than the traditional guarantees of time and place.
Programmatic Tv a Billion-Dollar Opportunity
A. Automated buying: Traditional TV ad buying practice is still manual and by the time campaign reports are generated, it’s already too late to do any optimization. Advertisers need to stop building silos around different types of TV activation and focus their efforts on a unified omnichannel approach to TV buying. Technology is available today to empower advertisers to build a singular media plan with consistent targeting and reporting and activate across all of the screens and media types available to today’s consumer. Programmatic TV lets buyers plan, execute, and measure in conjunction with the display, providing greater visibility into all aspects of an ad campaign. Automated buying helps speed up processes while eliminating manual ones.
B. Data-driven targeting: Data is at the core of programmatic, and this holds true for both TV and digital. With programmatic TV advertisers can go beyond the age, gender, reach, and frequency components of audience targeting based on gross rating points (GRPs). Leveraging first, second and third-party data sets can also help advertisers optimize for more personalized, relevant content to users, even as they switch between screens.
C. Cross-screen measurement: For marketers, the ability to measure the effectiveness of campaigns across multiple channels including TV could well become a reality in the not-so-distant future. Marketers could develop a unified KPI for TV and digital ad optimization similar to GRPs, or impressions, conversions etc.
D. Unified campaign management: As more and more number of audiences watch TV with a tablet, phone or a laptop close by, it’s no wonder that viewer attention is divided. A unified buying platform provides brands and advertisers with a single, seamless platform from which they can plan, buy, measure and manage all their advertising campaigns holistically, irrespective of whether audiences are viewing ads on set-top boxes or smartphones.
E. Real-time optimization: Programmatic TV will allow marketers to leverage real-time or near real-time feedback to improve and optimize campaign performance.
Why programmatic has yet to fully take off
While programmatic TV offers a world of opportunity brands and advertisers, it’s still quite new. Many cables and broadcast networks are hesitant to make their premium inventory available to programmatic buyers due to a belief that data-driven advertising might commoditize inventory and decrease prices for premium TV ads.
Another major factor impeding large-scale adoption of programmatic TV is scalability. In India, only a few households have addressable capabilities.
Unlike online ads that can be measured through metrics such as CTRs and video completion rates (VCRs), establishing engagement metrics for programmatic TV is a lot harder. There are many factors preventing the growth of programmatic advertising model in television industry. Standardization and integration are probably some of the key themes
To unlock the complete potential of programmatic TV and achieving large-scale adoption means overcoming several ideological and technical challenges. Advertisers, programmers, and broadcasters need to appreciate what programmatic TV can do instead of what they think it does. The biggest challenges with mass adoption are the change in the mindset of the industry as well as the growth of programmatic TV technology. Real-time bidding as well as the measurement for programmatic TV are still in its infancy but is surely on its way there.
Programmatic TV might not be quite ready for “prime time” yet, but as advertisers, programmers, and ad tech providers work through these challenges, the programmatic TV will begin to live up to its potential.
With watchers spreading their TV time nearly evenly between traditional remote controls and the computer mouse, advertisers must be prepared to reach consumers on whatever device they are using. What’s more, those who are watching on their TV sets are likely multitasking. As a result, advertisers will soon demand the ability to measure TV with the same effectiveness and accuracy that we do in other types of programmatic campaigns. Precision in cross-device video targeting, optimization, and viewability metrics will be critical to achieving programmatic penetration in the TV media market.
Another major factor impeding large-scale adoption of programmatic TV is scalability. In India, only a few households have addressable capabilities.
Unlike online ads that can be measured through metrics such as CTRs and video completion rates (VCRs), establishing engagement metrics for programmatic TV is a lot harder. There are many factors preventing the growth of programmatic advertising model in television industry. Standardization and integration are probably some of the key themes
To unlock the complete potential of programmatic TV and achieving large-scale adoption means overcoming several ideological and technical challenges. Advertisers, programmers, and broadcasters need to appreciate what programmatic TV can do instead of what they think it does. The biggest challenges with mass adoption are the change in the mindset of the industry as well as the growth of programmatic TV technology. Real-time bidding as well as the measurement for programmatic TV are still in its infancy but is surely on its way there.
Programmatic TV might not be quite ready for “prime time” yet, but as advertisers, programmers, and ad tech providers work through these challenges, the programmatic TV will begin to live up to its potential.
With watchers spreading their TV time nearly evenly between traditional remote controls and the computer mouse, advertisers must be prepared to reach consumers on whatever device they are using. What’s more, those who are watching on their TV sets are likely multitasking. As a result, advertisers will soon demand the ability to measure TV with the same effectiveness and accuracy that we do in other types of programmatic campaigns. Precision in cross-device video targeting, optimization, and viewability metrics will be critical to achieving programmatic penetration in the TV media market.
Special Thanks to: Mr. Sushman Biswas – Feature Writer – March Tech Advisor
Ms. Grace Kaye @ marketingland.com
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I read this article, it is really informative one. Your way of writing and making things clear is very impressive. Thanking you for such an informative article.
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