Programmatic TV will allow marketers and advertisers to display on television but have the specificity and targeting available through regular programmatic digital advertising. However, these targeting tactics are not nearly as sophisticated as digital advertising_yet! In order to actually understand programmatic TV, let’s take a step back and discover the different pieces that have led to the maybe (maybe not) of programmatic TV advertising.
Traditional TV buying stems from the gross rating points associated with inventory. These points are the percentage of the audience that tunes into a particular program based on the number of TVs available in the market. The second portion that leads traditional TV buying is the share, or how many TVs are turned on during that scheduled program. In traditional TV advertising the broadcast space is commonly measured in reach and frequency how many people do you want to reach and how many times do you want to reach them. In general, advertisers want to reach at least 40-50% of viewers and hit them at least 3-4 times. However, the actual data from these measurements is not available to advertisers until the end of a campaign. These delayed data measurements and the lack of targeting available through traditional TV advertising has been the start of the demise among buyers and sellers.
When a CBS sales rep visited Choozle last week, it was asked if they were feeling the disruption between the lack of cable subscribers and the introduction of technologies like cable TV he shared, Absolutely yes. It is not a matter of if these technologies start affecting networks and broadcasters advertising sales but when they start changing it.
One particular technology that has disrupted traditional TV advertising is what those in the video space refer to as OTT, or Over the Top. Over the top has had a few different definitions arise in recent years. One is that it is programs like iMessage that don’t need to be associated with a specific carrier but can be used across every and any network, like WiFi, AT&T, or Verizon. The second definition is that OTT is devices like connected TV or broadcast quality content delivered over the internet that you can subscribe to (HBO Go). The final definition that SpotX shared is OTT is the pieces from the above but include everything that is IP enabled, via public internet, that has inventory available across devices.
OTT can include MVPDs, like Comcast or most recently Amazon and the NFL, a distribution point where a lot of video content is sold by the distribution point themselves. These MVPDs have the rights to sell advertising into those streams.
Finally, with all things, the traditional television, OTT, and regular digital advertising, the topic of programmatic TV have come to light. Programmatic TV, in simple terms, is the automated buy of TV advertising slots. The main reason for taking the traditional to this level is to have that TV advertising but with the same amount of data that is available through programmatic technologies in digital advertising. At this time, inventory that is available programmatically only opens when that particular broadcaster says yes to a buyer for that slot, this is also referred to as Private Marketplace. Additionally, the majority of the open inventory is through connected TV where data is easily accessible. Many companies, like Roku, are still not on board with sharing the data collected through their devices to advertisers. This is due to the worry that advertisers will take this tremendous amount of data and use it for other reasons throughout the marketing strategy (cross targeting). For these companies to get past this worry, a system would need to be in place to filter through all the data and only send the data specifically requested or targeted to that advertiser, so nothing else spills over. However, even with the current holdbacks, it will only take certain contractual pieces to fall into place before the rest of the technology quickly evolves.
As the VP of Innovation at Trade Desk said, Connected TV is looking a lot more like digital advertising. It is only a matter of time before the big broadcast networks catch up.