Programmatic TV has been gaining traction throughout 2015 inspired by the spiralling growth of premium, long-form video content. Ad tech providers, media companies and brand conglomerates are starting to buy in. The aim is to capitalize on the new, household addressable audience made available through the ever-growing network of TV ready devices.
The majority of ad spend is now traded programmatically and the addition of TV inventory into the programmatic ecosystem is a testament to its success. Initial investors and early adopters have included some of the largest players in the digital space, a sure-fire sign that programmatic TV holds big potential.
‘Whatever can be automated will inevitably be automated, especially TV.’ Bob Lord, President, AOL
10 Reasons why programmatic TV is in ascendancy
1) The network of TV ready connected devices is growing; 77% of TV viewers now tune in using a smartphone, tablet or laptop device providing brands with a wider audience and more user-level data (Google DoubleClick)
2) Connected TV is becoming the norm (eMarketer June 2014)
3) The number of ads served to OTT devices is spiralling with 340% growth in Q1 of 2015 alone (Freewheel)
4) TV is accountable for the two fastest growing video content categories of Q1 2015, live stream video (140%) and long-form on demand (50%)
5) Premium long-form inventory drives high CPMs. An ESPN SportCenter 30 second ad placement CPM is $50-$100 (Media Assembly)
6) People trust TV advertising: TV has the highest level of trust (37% do trust) ahead of newspapers (12%), radio (7%), magazines (7%), websites (7%) search (3%), social media (3%) and outdoor (3%) (TV Nation/Thinkbox)
7) The Broadcast TV advertising industry is in decline due to rising ad costs and dropping viewerships. TV ad spend is shifting towards programmatic - by March 2016 80% of US ad buyers and sellers will have at least some investment in programmatic TV (eMarketer)
8) Programmatic trading continues to prove its efficiency. 2015 will be the first year that more than 50% of digital ad spend is traded programmatically (BIIntelligence)
9) Devices used for TV streaming boast ad completion rates of 93-97% (TubeMogul)
10) Large player sizes are more viewable - players of size 848x477 or above have an 89% viewability rate compared to the web average of 54% (Google stats)
Digital giants AOL and MCN have created their own programmatic TV marketplace, MCN programmatic TV. It uses AOL’s existing programmatic platform, ONE, and first party viewing data provided by MCN’s Multiview panel to offer a host of linear TV opportunities for advertisers. Channel 4 have created their own programmatic TV marketplace, All 4. The platform uses first party viewer data to offer household addressable linear TV ad placements across their network.
Some of the advertising world’s largest brand conglomerates have begun working with ad tech partners to test programmatic TV ads in an attempt to get ahead of the curve. Mondelez served 15 second linear TV ads programmatically during the biggest global TV ad spot of the year - the Super Bowl, while Proctor & Gamble worked with ad tech partners to deliver a programmatic TV campaign for their brand, Gillette, across the Sport1 network.
What are the problems and barriers?
A mist of confusion still surrounds programmatic TV and its limitations. It primarily involves the use of audience and/or user-level data to serve targeted linear ads over long-form TV content. Inventory is traded programmatically but at this early stage in its development, not often in real-time. Programmatic TV is device agnostic (or will be within the next two years) and works with TV on-demand, OTT devices and broadcast TV.
One of the main barriers of programmatic TV is its fragmented audience, making it difficult to target users across different devices. This fragmentation raises issues when it comes to measuring campaign performance, a task that is growing increasingly more difficult as the number of viewing options rises. As with the majority of nascent ad tech, programmatic TV has a few challenges to overcome before it really breaks through. SpotXchange covers these challenges in some detail in this white paper.
The emergence of programmatic TV is a reflection of the collective success of programmatic trading so far. Further afield…people will soon be asking why inventory isn’t being traded programmatically, not questioning why it is.