The Future of Programmatic TV

programmatic tv, future of programmatic

TV has always been a medium of change. When first introduced, it changed the way people consumed everything from news to variety shows. TV is yet again changing: now showing up on new types of screens and allowing consumers to watch programs when and how they want.

While TV has altered media consumption, programmatic buying has revolutionized how digital advertising works. So the melding of the two forms makes natural sense. Programmatic TV is on the rise, and it could dramatically change the way that TV advertising is bought and sold.

Why the Need for Change

The way that TV serves advertising hasn’t changed in decades: People watching a program receive similar ads no matter where they are and what they consume. This type of traditional TV buying is fraught with inefficiencies. TV cannot stay constrained within this “mass media” mindset. It must change.

Unlike the traditional TV buying process, programmatic is designed to reach the right audience at the right time (where they are in the buying cycle) in the right place, i.e. whether they’re streaming video on their mobile device or using streaming services like Netflix on their flat screen TV.

The TV industry seeks to apply the same efficiencies that digital media services have seen with programmatic TV ad buying. This means the use of programmatic TV is steadily increasing. This rise is due to the number of smart TVs now available as well as the number of consumers using mobile devices and computers to consume TV and video media.

Current Obstacles to Embracing IT

While programmatic TV has all the hallmarks of a great product, its programmatic capabilities are presently lacking. Unlike in digital media, programmatic TV does not have the same abilities as far as online auctions, real-time purchasing and automation are concerned. There has been some use of data for targeting, but it’s not fully programmatic.

Another barrier is simply the old mindset of how TV advertising should be bought. Traditional TV executives still believe that the trading model that has always been used is the best. They need some convincing that real-time bidding (RTB) is more beneficial than the trading model, especially when competition is high.

There are some toe-in experiments occurring now, but it will take some time for TV executives to fully understand the benefits.

The Real Advantages of Programmatic TV

The future of programmatic TV stands to benefit not only the TV industry, but brands, agencies, and tech vendors. Advertising dollars will be more targeted and less wasteful in comparison to traditional TV ad buying. Although currently underdeveloped, programmatic TV promises numerous advantages similar to digital video, including:

  • The ability to directly target the right demographics and psychographics: The audience can be as broad or as niche as a marketer wants it to be
  • Improved value of TV advertising, including making ad spaces more profitable.
  • Eliminating the need to buy ad space only for a particular time slot or show; instead, you can buy ad space that corresponds to the consumers who are watching it.
  • Improved efficiencies for campaigns and reduced ad spend waste.

In time, the benefits of programmatic TV will overtake the barriers to embracing it. Marketers will see the same efficiencies and optimizations that they currently see with other programmatic buying opportunities. Once this happens, traditional mindsets will change, and future of programmatic will emerge as the primary vehicle for TV ad buying.