The Cautious Courtship Of Programmatic And Linear TV

ConvergeSpendProcter & Gamble’s reported push to automate 70-75% of digital ad buys by year’s end underscores the convergence of TV, CPG marketing and programmatic media.

“The closer we can tie shopper cart data to media, the stronger we get,” said Jen Mennes, director of media and public relations for Post Foods, during The Advertising Research Foundation’s Audience Measurement 2014 summit in New York this week. “This is helpful in the digital space and we would love TV to get there.”

TV is certainly the arena where many CPGs had their greatest advertorial successes. P&G, one source told AdExchanger, was “one of the first pioneering marketers who figured out how to use TV to make an emotional connection between women and chemicals in a box.”

CPG companies are becoming increasingly interested in bringing data-driven programmatic strategies to this old and familiar format. This is notable as brand dollars shift to other digital channels.

P&G, for instance, upped its digital video spend by 25% this year, mostly by investing in programmatic platforms, one source claimed. This doesn’t reflect that TV is less important, just that messaging channels are symbiotic and CPG marketers need to account for all of them. Programmatic insights can make linear TV better.

“When you look at the media budgets for the big CPGs, if they’ve got a $10 billion media budget, maybe 10% of it is in digital and [80%] is in TV,” said Ted McConnell, EVP of digital for the Advertising Research Foundation, and a P&G alum. “You don’t need to [move the needle significantly] in TV to have a huge bang for your buck. I look at it this way – if we could take insights from digital and use them to make TV 10% more efficient, the business effect would pay for digital entirely.”

Brands like Post Foods, Lexus and P&G – all of which make TV buys – are looking to connect massive loyalty and shopper databases with ad serving data in order to better target across channels, including television – which in turn creates demand for programmatic TV.

“If we’re moving from a world based on estimates to actuals, you’ll move from targeting audiences [predominantly through television] to data-enhanced targeting of customers,” one source told AdExchanger.

Certainly McConnell sees great upside to programmatic TV. “[It will] change the game, and that’s just based on numbers,” he said.

Programmatic Means More Data, Not RTB

But before the industry gets too excited, there’s still much debate about defining what, exactly, “programmatic” entails. During the ARF Measurement forum, network television and online media camps didn’t agree on a common definition. Dave Morgan, founder and CEO of Simulmedia, posed a question to ARF panelists Tuesday, “By 2020, will a majority of video ads in the US be bought and sold programmatically?”

Discussing ABC’s recent headline that it would be running a programmatic ad beta, Adam Gerber, VP of sales development and marketing for ABC Television made one thing clear.

“We are not moving in to an RTB environment,” he said. “We’re not enabling any of our inventory into open exchanges. None of our linear inventory is part of the trial. The [trial will] apply first and third party data to video inventory to more effectively target so [advertisers] don’t have to rely only on demo targeting – [it’s] connecting their data with our ad server.”

Associating “programmatic” with “open exchange” still happens. The concept of an open exchange is anathema to many in the ad industry, as was evident in a Beet.TV interview in which GroupM’s investment officer stated its programmatic buys would soon be limited to private deals only with publishers.

“Yes, real-time bidding is a subset of programmatic, but it is not ‘the’ definition of what programmatic is,” said Lauren Wiener, president of global sales and marketing at Tremor Video. “None of us are suggesting linear TV…will enter an RTB environment. But, advertisers want to layer in rich data” from DMPs, etc. for better profiling.

The networks agreed, to an extent: “Programmatic is about applying data in real time for dynamic inventory,” ABC’s Gerber said. “The digital video ecosystem will move there, but large swaths of the [linear TV] business will remain focused on human-to-human contact. automation is not programmatic. We still send faxes and emails back for linear TV deals. There’s still an MVPD in the middle who controls access to the home.”

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