Which Kind Of Buyer Gets The Most Out Of Programmatic TV?

jimcarusoData-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Jim Caruso, vice president of product strategy at Varick Media Management.

In digital media, change is constant, and in the past five years we’ve seen radical shifts in how ad impressions are bought and sold.

That’s not the case with TV, where airtime has been bought and sold with so little variance over the decades that change is often met with resistance. It’s no surprise then that programmatic TV has been slow to catch on with traditional TV buyers and planners.

But perhaps that’s the problem. Programmatic TV is being sold as a disruption to the old model, when in fact it should be aimed at brands that lean heavily on digital in their media mix. Right now, programmatic TV is a far better tool for digital extension than it is as a replacement for the traditional way of buying TV.

Like any emerging technology, programmatic TV is confusing, and even its sellers have difficulty articulating its value proposition. Part of this stems from two buzzwords driving the innovation in TV buying: “programmatic” and “addressable.” Often, they are used interchangeably and incorrectly, complicating the matter.

Programmatic TV can be better understood as “data-driven TV,” and can be delivered for addressable or linear consumption. There are many programmatic TV platforms that operate in the linear or addressable spaces, with some crossing both. Some providers repurpose existing technology from AudienceXpress, Clypd or Admore, while others have direct access to remnant TV inventory from multichannel video programming distributors.

For digital buyers who’d like to experiment with TV advertising, programmatic can offer similar targeting parameters and efficiencies they are used to seeing in display. Available inventory is opportunistic, remnant airtime, meaning that pricing is cheaper than it would be for upfront or scatter buys. While this type of buying doesn’t necessarily guarantee prime dayparts or programming, it can be a low-cost segue into television for a digital marketer. Best of all, it offers a more cost-efficient and targetable solution compared to traditional TV buys.

While TV is still the dominant media channel for delivering ad messages, digital is growing, necessitating hybrid video strategies that span programmatic TV and digital video for some brands. By leveraging programmatic TV, advertisers can tie their video ad buys together across screens, creating a fluid marketing message.

Think about it: In an era where many younger consumers are cutting cords and doing away with traditional TV, it makes sense to buy video across desktop, mobile and tablet. But just because some consumers are eschewing traditional TV in their homes doesn’t mean that all are; no audience is comprised solely of cord cutters. A video campaign tied together across screens hits an audience wherever they are consuming video content.

Programmatic TV makes much more sense for brands that are focused on digital and want to combine their reporting in one place. Programmatic TV offers more comprehensive reporting and cheaper costs than direct TV network buys. Programmatic platforms also aggregate inventory from multiple networks, which facilitates the buying and planning for those who are used to using a programmatic platform to handle their digital media spending.

With more consumers watching programming on connected devices or video on demand, one can expect more precise data targeting and efficiencies from programmatic TV. That will only continue to grow since connected devices remain a cheaper alternative to most cable offerings. As marketers move more money to programmatic platforms, they’ll begin to see more bang for their buck.

Follow Varick Media Management (@VarickMedia) and AdExchanger (@adexchanger) on Twitter.

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1 Comment

  1. Jim, great piece.

    To avoid some of the speed bumps with anything new, Programmatic TV mustn’t be described as a “replacement” for legacy TV buying, but an “enhancement” to the existing transactions and relationships between media owners and marketers (across both digital and TV budgets).

    Programmatic TV should also not be thought of as a strategy for transacting only remnant inventory. Many premium media owners have been making noise about taking advantage of the data-driven and streamlined sales benefits that can come with this, while making sure that their prices and relationships are protected with these new opportunities.

    Separate, but related question: When will the concept of digital vs TV budgets be a thing of the past and this becomes a moot point?