NewFronts: How Original OTT Content Advances Programmatic TV

jamesshearsOn TV And Video” is a column exploring opportunities and challenges in programmatic TV and video.

Today’s column is written by James Shears, general manager of advanced TV at The Trade Desk.

At this year’s Golden Globe Awards, actor Gael Garcia Bernal was at a loss for words. He’d just won best actor in a television series, musical or comedy and could hardly believe it.

He had no speech prepared, and Bernal had never expected “Mozart in the Jungle,” a digitally released show about classical music from Amazon, to get that kind of national attention.

Amazon’s sudden surge into serious competition with the heavy hitters of broadcast TV is definitely eye-opening for media buyers. This year’s NewFronts are slated to be the biggest yet, with all eyes on digital content in May.

TV buyers’ reactions to the NewFronts have been mixed – to put it lightly – since they kicked off in 2012. Though they took a few years to get here, the NewFronts have finally turned the corner. YouTube, Amazon and Hulu, the big three ad-friendly over-the-top (OTT) producers, have helped legitimize the event by virtue of their quality, original content production.

Although the NewFronts are catering to the growing capabilities of programmatic TV buying, they aren’t replacing the upfronts just yet. Savvy buyers should have a stake in both. OTT and linear TV are both viable, potent advertising channels edging toward programmatic buying. The playing field for content quality and viewership will continue to level.

Following “Transparent” in 2014, “Mozart in the Jungle” is Amazon’s second consecutive original show to win the Golden Globe in the musical or comedy category. The other nominees included one broadcast network series from FOX, two series produced by premium cable networks, HBO and Starz, and two originals from OTT content providers, Netflix and Amazon. This shifting balance between linear and advanced TV has major implications for programmatic TV buying.

NewFronts’ Maturity Will Help Drive Programmatic Forward

It’s no secret that the number of cord cutters is growing dramatically year over year. For instance, 86% of Internet users believe pay TV is too expensive, further freshening the validation for ad-supported and mixed-model OTT providers such as Hulu, YouTube and Amazon. Some viewers will pay for an ad-free watching experience. For the rest, the advantages of programmatic marketing will help enhance and deliver a more relevant viewing experience.

Though traditional measurement, such as gross ratings points, is lagging on OTT, the possibilities for advertisers are still immense. Through logins, IP addresses and device IDs, data can be mapped to effectively target appropriate audiences on smart TVs, gaming consoles and other streaming devices. And perhaps even more important, given the targeting, someone could actually measure if the ad drove a consumer to action or purchase.

For ad folks, the big three, Amazon, Hulu and YouTube, are the OTT producers to watch. These innovative leaders have recognized the industry’s evolution and fundamentally paved the way for programmatic TV conversations. In terms of programmatic news, I expect several developments for TV buyers to emerge from the NewFronts 2016.

Relevance + Reach 

Linear TV has reach. With high-quality original programming like “Mozart in the Jungle,” Hulu’s “Casual” and the new lineup of YouTube Red Originals, OTT is making a compelling argument for reach, sometimes even by going viral.

Though it still trails the wide net cast by traditional networks, reach isn’t everything. Relevance is another critical element in every marketer’s playbook, and OTT has a definitive advantage right now.

Cross-Device Targeting

The same advanced TV data that gives advertisers the ability to customize their messaging also enhances cross-device advertising capabilities. OTT platforms like Hulu are uniquely positioned to strengthen cross-device targeting for television buyers. This is a big selling point and a major differentiator for the NewFronts.

Private Marketplace And The Forward Market

 TV buyers go to the upfronts to guarantee inventory. Private marketplace transactions are laying the groundwork for automated advertising’s forward market. Though still in the early stage of development, now’s the time for TV buyers to weigh in on the shifting landscape.

The potential for innovation on OTT is massive, and the big three are helping drive the conversation forward. This year’s NewFronts will help shed light on a pivotal moment in the future of programmatic TV.

Follow The Trade Desk (@TheTradeDeskInc) and AdExchanger (@adexchanger) on Twitter.

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