Separating The Myth From Reality In Programmatic TV

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TVProgrammaticThe general consensus is there’s a long way to go before linear TV buys are fully automated.

Despite advancements in pushing programmatic into video-on-demand (VOD) environments, the enablement of programmatic transactions in linear TV is still in its infancy. Part of this has to do with the state of the technology.

“All the tools in market today for linear [TV] programmatic are media planning tools for agencies to be able to forecast ad avail numbers and audience demo data,” said Mark Trefgarne, CEO of programmatic video sell-side platform LiveRail.

This data is a step in the right direction, but it’s not being applied in a particularly sophisticated manner. While TV advertising planners have the information to efficiently outline media plans, Trefgarne is skeptical whether they’re actually maximizing these benefits.

“[The data] probably generates email or facts to someone who then sticks that in a tape player somewhere at a TV station,” he said.

One question in the industry is to what degree premium inventory will be available for programmatic trading. In online advertising, programmatic trading in an exchange environment is largely associated with remnant. Even online video is tiered. There’s premium programming on one end of the spectrum and user-generated content on the other, with a wide range of content of varying quality in between.

But all television inventory is premium, said Amit Seth, EVP of global media products at Nielsen. The convergence of online video and linear television complicates matters.

“In the converged world, the challenge really is how do you combine different objectives to yield value for the buyer,” Seth said. “When media is sold in a programmatic manner, what becomes the right metric to measure it by? We believe there will be new metrics that we will have to invent.”

One of the conundrums in cross-platform buys is the need to factor differing metrics from digital, mobile and tablet into the equation, he said. Advertisers will need to answer questions such as, “If the person was shown an ad on TV and saw the same placement digitally, is this over the frequency limit or wasteful?”

In addition to the question of duplication and waste, all players – vendors, advertisers and third-party ratings bodies alike – will need to balance supply and demand, as well as simplify the rhetoric.

During a video panel presentation at Programmatic I/O in San Francisco on Monday, Tremor CEO Bill Day noted, “We must take the cost and complexity out of the business to achieve what we’re after.” The final result is not whether or not digital video will completely eradicate TV budgets, but whether “I can complement what television does with reach and frequency with online video.”

In order for that to happen, the industry needs an overarching cross-platform measurement apparatus that combines digital and linear television metrics. Nielsen, Seth said, is working on it.

 

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