Next month in San Sebastian we will be bringing together a cross-section of the TV advertising ecosystem to explore the future of programmatic TV. The idea behind TV Rise is to assemble a manageable number of the key players to explore how the industry can push programmatic TV forward in Europe. Companies taking part include Sky, BBC, IPONWEB, Group M, Mondelez International, RTL Group, ProSieben, RTE, TDF, Xaxis, Havas, Xaxis, Starcom Mediavest and Mastercard. While there will be a lot of ground to cover, below are three key questions we’ll be asking at the event. In most instances, those questions simply lead to more questions, which hopefully we’ll be able to answer when we have the various key players around a table.
How do we define programmatic TV advertising?
How is programmatic TV being used today? Is it simply an automated booking process with some data baked, and if that is the case, how is it likely to evolve in the future? Will we ever see real-time bidding(RTB) at scale for TV advertising, or does the TV economy simply require large amounts of spend to be both guaranteed and paid up front to cover production costs? Most importantly, how is it likely to play out in different markets considering the notable differences in set-top-boxes and infrastructure?
What’s the True Value of Data in TV Advertising?
Who holds the strongest hand when it comes to first party data in TV advertising? TV operators? Broadcasters? The tech platforms? If it’s the latter, will the tech giants be able to convince broadcasters get on board, or will the current generation of TV operators be able to compete head-to-head.
And is access to first party data going to be as important as it was with desktop and mobile advertising, or is TV advertising a little bit different? Just this week we saw how P&G was cutting back their spend on Facebook in favour of TV advertising. P&G said that Facebook targeting wasn’t worth the money for brand advertising and that there’s still a lot to be said for mass reach. Similar sentiments have been expressed on several occasions by Richard Brooke, who oversees Unilever’s media operations in Europe when it comes to addressable TV, which he is sceptical about for big brands.
That said, the world isn’t made up only of big brands. For every global brand there is a hundred other regional companies looking for better targeting and who would be less concerned about building lifetime relationships. Then there’s already a large DRTV market, which could grow significantly bigger if TV advertising is able to deliver even more for performance advertisers.
Can Programmatic TV save TV Advertising?
While it’s all very well to talk about using data to ‘grow the TV advertising pie’, the TV industry is increasingly challenged by an array of ad-free SVOD services. These services have transformed consumer expectations both in terms of how they expect to consume media and in terms of what they expect in terms of advertising.
OTT hasn’t only eaten into linear TV consumption. It has also changed people’s expectations when they turn on to a TV, and increasingly large numbers are signing up for ad-free OTT services. However, it remains to be seen how far these businesses can scale without advertising. Most lean heavily on content that was originally produced for TV – and often paid for by advertising or some other revenue source – and it’s hard to conceive how anyone could expand into areas like live sports without the backing of big brand money to supplement their bids for rights. Ultimately, as VAN has predicted on these pages many times before, SVOD services are likely to turn to advertising (indeed, Amazon started experimenting with personalised ads earlier this summer).
Two of the big consumer gripes with TV advertising are relevance and the lack of frequency capping. As things stand, TV viewers are often bombarded with the same irrelevant ad repeatedly across different stations and platforms. If implemented correctly (and the more aggressive retargeters are kept under control), the shift towards data-driven TV advertising will help in the battle against SVOD.