Welcome to the 20th edition of AdExchanger’s Connected TV roundup, coming to you straight from the frontlines of our Programmatic IO conference in Las Vegas.
Many of this week’s discussions reflected the trends dominating ad tech news: Connected TV, generative AI and first-party data were big ones. But the overarching theme was automation (ideally without sacrificing jobs).
For TV – CTV in particular – automation includes a much heavier focus on programmatic. Programmatic gives buyers flexibility to bid and optimize campaigns in real time, which saves both time and money. Automation is also making its way onto TV advertising with better content recommendation algorithms.
Gone are the days of sealing direct deals over handshakes and drinks. CTV is going programmatic, including during the upfronts, where Samsung Ads forecasts that 70% of CTV ad buys will be transacted programmatically, said Joe Melaragno, Samsung’s head of agency development and DSP sales, speaking at Prog IO.
Programmatic plugs
But although the automation is picking up steam in the TV space, programmatic acts differently depending on whether we’re talking about streaming or linear buying.
This week, I interviewed ad tech executives from DirecTV and Roku on stage at Prog IO to dig into the details.
CTV advertisers prefer either programmatic guaranteed, which is a direct deal that offers automated campaign management that isn’t available with traditional insertion orders, or private marketplaces (PMP), where buyers can automate bidding for inventory from specific programmers at lower prices.
When linear inventory goes programmatic, it typically isn’t biddable at all, DirecTV’s SVP of ad sales, Matt Van Houten, told me. Linear TV wasn’t built on digital tech, so it calls for a “programmanual” approach, meaning programmatic guaranteed that includes some extra leg work manually generating and managing deal IDs.
TL;DR: The need for automation is bringing both streaming and linear inventory into programmatic pipes, albeit in different ways.
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But the rise of automation goes beyond programmatic ad buying. Using machine learning for content recommendations is also a huge priority.
According to CMO of LG Ads Tony Marlow during a panel at Prog IO, roughly 39% of viewers watch what’s recommended on the home screen of a streaming service or smart TV.
The goal for programming distributors is to bump that number up using machine learning and AI to improve recommendations. The more relevant the content, the more viewers will watch – and the more advertisers will pay to reach an engaged audience.
Or so the story goes.
Which is one reason why streamers spent a lot of time talking about automatic content recognition (ACR), the viewership data behind personalized content recommendations, at the NewFronts this year.
TV manufacturer Vizio, for example, sits on a big pile of ACR from its data subsidiary Inscape and is investing in machine learning to get viewers (and advertisers) to stick around. The company will prioritize AI to boost content customization, said Travis Hockersmith, group VP of Vizio’s platform business, also speaking at Prog IO.
What I’m wondering is: Which forms of automation will get the most attention from the TV industry this year?
Let me know what you think. Hit me up at alyssa@adexchanger.com.
