Programmatic TV: What Exactly Does it Mean?

Phil DuffieldProgrammatic trading has been steadily transforming the display, mobile and video landscape. The next port of call for programmatic is TV advertising. Here Phil Duffield, Senior Vice President, International at, explains what it is and how it will affect how media is bought and sold. Phil will be delivering a keynote presentation at New TV Frontiers in London on June 10th.

Traditional television, and the way advertising finds its way onto TV screens in the living room, has seen very few changes since the first commercial broadcast nearly sixty years ago. That is, until recently.

The BBC’s launch of iPlayer in 2007 was a milestone in the history of television viewing, and its almost instant success indicated that people no longer wanted to be tied to the TV or the TV schedule. Fast-forward to today and most people carry a smartphone or tablet computer – and therefore their own personal TV screen – with them all the time.

This multi-screen, catch-up TV world changed the game for advertisers, and marketers looked for ways to harness it to recapture the value of their advertising investment. Online video has boomed as a result, which, along with increased consumption, has also seen greater ad spend being directed towards it.

However, TV and digital video are very different, are transacted differently by different groups of people using very different selection criteria. In other words, the video advertising landscape has multiple players and an increasingly cumbersome workflow that includes managing many systems in order to move advertising investments into the right channels.

At least, that was the case. This year, the talk is about bringing back the efficiency of TV buying from decades ago and tying it together with the precise targeting abilities enabled by digital advertising. It’s called programmatic TV.

Programmatic is About More than Auctions

Traditionally, programmatic referred to an auction-based environment for buying and selling digital advertising, but the concept has expanded greatly to include various models of automation. This extends beyond the actual buying and selling of media, and includes putting machines to work on applying greater efficiencies to planning and optimisation of advertising dollars.

Programmatic TV is the application of those automation principles to television buying. The result? The medium that has to date bought and sold advertising on imprecise age and gender metrics (because that was all that was available), now has greatly improved targeting abilities and the ability to channel ad spend towards specific audiences. For advertisers, it’s the difference between specifying that they want to reach females between 18-35, and being able to target females between 18 and 35 that like a particular brand of car, for example.

Real-time data, the lifeblood of digital advertising, makes this possible. And, of course, applying programmatic principles to TV is yet another step towards using data to engage with individual viewers, across the multitude of screens on which they watch video.

Put another way, it’s the holy grail of marketing – a single ad buy that can effectively reach the right audiences with a relevant marketing message at the right time, regardless of the screen on which they are viewing it.

More Power to the Consumer

This is music to the ears of brands and advertisers wrestling with the new TV world, in which control is in the hands of the consumer, who can vote with their feet, skip ads and only watch the content in which they are interested, when it suits them.

But the power of programmatic data does not stop with its online capabilities. Nielsen data is now being supplemented with behavioural data collected from the set-top boxes of US cable providers and third-party consumer purchase data. Combining these sets of data in a programmatic environment means linear advertising spots can be identified more effectively and bid for in the same way as digital inventory.

Not surprisingly, as programmatic converges across all TV screens, spending is projected to skyrocket. According to IPG’s MAGNA GLOBAL, US markets will see just over a total of $55 billion in programmatic spending in the next four years, while by 2017, 59% of UK online display ads will be traded programmatically, making the sector worth $32.5 billion.

These figures make it tempting to predict that the traditional media buying processes of TV are on the brink of extinction, but this would be naïve. Rather, programmatic provides an all-important bridge between online and linear TV, enabling a better understanding of how advertising budgets are being spent to find the right audience, on the right screen, at the right time.

There’s no doubt that these changing times are challenging for media buyers and sellers alike. But there’s no escaping that programmatic TV, and all the advantages it offers, is the shape of things to come.

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