For Publishers, Programmatic TV And Cross Screen Still Far From Reality

jamescurran-updatedThe Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by James Curran, CEO and founder at STAQ.

Google has said that programmatic TV is more sizzle than substance these days, and I have to agree.

Some media companies might be selling on addressable TV channels, but I would hardly call any of it programmatic or cross-screen. Most programmatic TV today still requires manual planning, trafficking and reporting. Cross-screen is even farther from a reality, where contract, delivery, optimization, measurement and billing are all done completely differently on TV compared to digital channels.

One way to get a good picture of how much work media companies have to undertake to make programmatic work across screens is to think about first movers such as Verizon. It theoretically would need to get local TV sales people interacting effectively with AOL programmatic specialists to put a cross-screen deal together. Same company, different ad sales universes.

The term programmatic is still a stretch even for display advertising. A recent Operative survey shows that “heavy manual labor” is the biggest issue for programmatic publishers today – talk about ironic. Digital advertising operations at most media companies are the result of a series of reactions to advertiser demands rather than a consciously streamlined operation. As a result, media buyers and technology middlemen make billions of dollars in profit each year by taking advantage of inefficiencies in the market. This has to change if publishers want to benefit from the move to programmatic TV, and especially as they prepare for converged selling across TV and digital media.

That said, many TV organizations have been working off of only one set of audience measurements and metrics for half a century. Everyone uses the same terminology and buys and sells more or less the same way. When these two parts of media buying start to collide, the biggest risk is that TV media buying gets sucked into the overly complex world of digital media and publishers are stuck with an even more costly and complex advertising business than they have today.

Instead, publishers need to work to make sure that things go the other way, that programmatic advertising gets more streamlined and therefore fits into TV advertising more effectively. This is important for three reasons.

First, advertising across channels is mainly about an audience, and that same audience can’t be cheaper on one channel than another just because a publisher isn’t organized. Second, publishers need to price their audience correctly across channels. While audience buying is a steal online, it’s actually more expensive on TV. This can’t last in a cross-screen environment. Third, TV and video inventory are where the money is, and publishers need to focus their business around their most valuable content. Publishers must pull back from the low-quality, high-scale vortex of programmatic display.

One Audience, Many Screens

Publishers must create a streamlined plan for audience selling across screens. If a media company is representing one audience, advertisers really should be sold only one audience across TV and digital. This means no more creative third-party audience metrics, but a focus on proprietary well-defined audiences that work for all channels.

Many media companies have a data management platform, but few outside of the biggest and smartest are actually focused on building a powerhouse first-party audience across channels. This should be the absolute top priority for publishers that want a streamlined cross-channel product.

Pricing Parity

Publishers must also streamline pricing, which is vastly different across TV and digital. Before we even talk about the GRP versus the impression, publishers need to price their products for a single market, rather than have such divergent pricing systems that allow buyers to get a major deal buying the same audience on one channel versus another.

While programmatic RTB inventory is thought of as a place to get a good deal, programmatic TV is often more expensive because advertisers are eliminating waste and layering audience buying over a regular media buy. Digital teams may have to sacrifice long-tail scale for the sake of a more premium product that brings in the audience that is most desirable across channels.

This brings me to my last and most important point: Publishers have a content war to contend with. Everyone from Amazon to Facebook is competing for audience engagement with media companies. Publishers must remember that the value of TV is in its quality and scarcity – a rule that was thrown out the window on digital media a long time ago.

Advertisers get what they pay for, and they have learned not to pay much for programmatic display advertising because a lot of it is garbage. Now is the time for publishers to clean out their closets and get back to providing a quality product that commands top dollar across screens. With one audience, streamlined inventory and normalized pricing, publishers will be set up to actually deliver on the promise of programmatic TV.

Follow James Curran (@james_curran), STAQ (@STAQ) and AdExchanger (@adexchanger) on Twitter.

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  1. Great article James. We still have a long ways to go before programmatic is a reality, especially for cross screen. Until there are more partnerships in place the pricing parity is going to exist for a while considering the huge cost difference between video and display.

    Regarding GRP vs impressions – I would recommend looking at cost per incremental sale – as that is an indicator of the incremental impact of using that channel. Compare your synced target audience versus your CRM system to determine this and you solve the problem of attribution.

  2. Many good points…we do have a ways to go in cross screen. Programmatic TV is well underway for local broadcast TV stations in 75% of the country. It’s fully functional, not Beta and transacting daily via WO PTV – WideOrbit’s programmatic platform.
    Current $$ are from DSPs and other demand sources that are using data to establish audience value for specific station/specific program/market and placing offers via a buy side dashboard. The budgets are coming from digital video. It’s additive to spot TV and a safe, fraud-free environment for brands. There’s a lot of noise out there about programmatic and few operational platforms. WO PTV is one that is.
    There’s still huge upside in the traditional media space as this technology evolves with scale and industry acceptance.