Programmatic TV: Agencies Should Start Watching And Investing

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

Today’s column is written by John A. Holmes, partner at Sq1.

Programmatic television is the future of advertising. By purchasing TV inventory programmatically, brands can pair the full-screen sight, sound and motion experience of television with the advanced audience segmentation that has for years made online advertising so attractive.

Yet many agencies hesitate to start reaping these rewards. For some, the issue comes down to being unfamiliar with the technology or hesitation to start something new. For others, the problem is that the inventory available for programmatic buying is still fairly limited.

The real question is: How do you get started?

First of all, agencies shouldn’t fear technology. If they aren’t understanding it, they should find someone who does and partner with them until they do.

Second, they should become early adopters. If they are afraid to climb out of their comfort zone, they’ll be in a world of hurt later when they’re being left behind.

Measurable Results

We’re in the business of giving clients results they can see, track and brag about. With programmatic TV, success is actually measurable.

A client that sells Brand X cereal, for example, may want to target women aged 35 to 45 with children. They could potentially take the guesswork out what TV shows these women are watching and when by purchasing a household addressable campaign. That way, the cereal ads are airing on whatever network the household is watching. Then, after the campaign runs, the cereal maker can use shopper loyalty data to see if they’re buying its cereal and make adjustments accordingly.

While premium television content remains extremely popular, more people are accessing it online through streaming and on-demand TV Everywhere apps. By integrating programmatic television into their media plans, marketers can use data to reach the same target audience across all of their various devices. Plus, the money an agency saves its clients by not showing their programmatic TV ads to viewers outside their target demographic can then be reinvested in reaching more of the right people online.

A Boon For Marketers, Networks and Publishers

As smart TVs continue to grow in popularity and an increasing number of consumers become accustomed to watching high-quality video on their mobile devices, the lines between what we consider television and what we consider online video will become blurred to the point where we no longer bother to distinguish between the two. In this environment, marketers will finally grasp the holy grail of being able to make one buy that allows them to reach the right audience across native web series, linear television and TV Everywhere streams.

For networks and web video publishers, the future of programmatic television will mean being able to sell every impression without worrying about running make-goods because their ratings underdelivered. On both sides, programmatic TV promises to bring unprecedented ease and scale to video advertising transactions.

The good news is that the days of widespread programmatic TV buying are coming sooner than you think. Just in the past few months, we have seen Mondelez use TubeMogul’s programmatic platform to purchase a 15-second regional ad during the Super Bowl and the E.W. Scripps Company announce it will soon join Cox Media in making inventory available to programmatic buyers.

And while many cable providers are jumping in and following suit, including Dish and DirecTV, making inventory available for advertisers to buy programmatically, there is still a limited supply of spots available. That’s why it’s important to supplement national campaigns with a healthy blend of traditional media schedules, although there are challenges in weaving programmatic television buys into the overall scheme of campaigns.

As more major players begin to follow suit, marketers will eventually have no choice but to embrace automated TV buying on a major scale. In the near term, they should start by making themselves familiar with new technologies and devoting whatever portions of their budgets they can to leverage the power of programmatic TV.

Follow John A. Holmes (@radioholmes), Sq1 (@Sq1Agency) and AdExchanger (@adexchanger) on Twitter.

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  1. Nice article John. Wholeheartedly agree the early adopters that gain experience now will have an edge over their competition – programmatic TV gains traction quickly!

  2. Adam Kay

    Agreed w Scott. I kept my distance for too long with this new frontier. Once I took a look around, it wasn’t such a scary place.