Programmatic TV: Revolutionize Television Advertising Industry
by Melissa Patterson Advertising 17 August 2016
It is reported that television advertisers are going to spend close to the US $84 billion per year by 2018 in the United States. Currently, most of the budget is spent during the fall and digital media businesses and TV networks attempt to keep their collections for that season. The revenue earned in the advertising industry is through the pitches made to marketers by TV and digital media advertisers. The ads left in the inventory get sold in the market later.
The traditional style of buying and selling ads used to work well, but its inefficiency has become palpable. Manual and cumbersome methods of interaction hardly work in times of data overload. That is why the television industry is trying to find out if the digital approach will be more conducive. The industry is witnessing huge responses for marketers who are using programmatic advertising, and hence, the TV industry is trying to be as efficient as digital advertising.
Even though there is nothing wrong with the traditional model, programmatic advertising is simpler, faster and better. Of course, there are some challenges, but the task of programmatic is to identify attributes of individuals and then serve relevant ads to them. But programmatic on television has not been able to penetrate to a great extent.
An advertising technology solution trying to help the industry should enable data-driven purchasing of TV ads. The advertisers and distributors will be in a position to generate revenue through their ad inventories and the ads served will not depend on the size of the screen, exclusive programming is done on it, and whatever other content exists in the devices connected to the television. Different brands advertising their specialties can be more specific in their targeting without serving the viewers irrelevant and repetitive ads.
How brand advertisers leverage the potential of programmatic TV
- There are both, marketing and business objectives to achieve. A system that is able to automate single-handedly how it should plan, buy, and measure across different formats is definitely a huge profit for the brands.
- With programmatic, the marketers don’t keep shuffling between buyers and sellers, generating reports of campaigns that have no time left for optimization. Buyers actually plan, execute, and measure simultaneously and display 360-degree views of advertising. This type of advertising has focused on business objectives and viewers.
- A basic component of programmatic is data. The programmatic TV has to be able to handle the data overload that includes age, race, gender, and other parameters. Based on gross rating points (GRPs), programmatic ads should be able to use the data for desirable responses. The entire system is designed to segment audiences with the help of first-party, second-party, and third-party data. The system also provides customers with more relevant and personalized content irrespective of whether the user uses one screen or multiple ones.
- The impact campaigns have on viewers can be measured. For TV optimization, the KPI may be a better and unified GRP across digital and television, videos, viewable impressions, sales lift, or brand lift.
It doesn’t seem like programmatic TV will have the same kind of start as the digital ad platform. There is a rare possibility of open exchanges or even real-time bidding (RTB). There will be a huge demand for control of the transactions for a rarely available and premium inventory such as TV. Hence, we might probably see a mix of high preference deals, deals that will happen via private exchange and programmatic reservations.