Programmatic Buying: An Unstoppable Force

programmatic buying
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The traditional TV advertising model is well established. Many still consider it completely separate from the fast-moving world of digital media buying. But new technologies, as well as changes in how people interact with TV content, have started to bring these worlds together. Programmatic TV ad buying is becoming a new standard in TV advertising.

New Technology and Viewing Habits Paved the Way

Most people used to watch TV via cable or satellite set top boxes. Now, more and more (especially millenials and younger audiences) are switching to digital TVs like Apple TV. They’re also watching programs across multiple platforms and devices. This creates a huge opportunity for media buyers. There’s a direct digital “pipe” to viewers providing a large set of audience data. This pipe is expanding in size and complexity every day. Advertisers can use this wealth of data—viewer location, income levels, viewing habits, and more—to serve targeted ads via automated systems. With programmatic TV ad buying, instead of buying ads based on rough assumptions about which people will watch certain programs, advertisers can buy the audience most likely to respond.

TV and Programmatic Buying Right Now

Buying TV ads programmatically isn’t just speculation. It’s already here. Did you know that a Super Bowl spot was bought programmatically this year? Mondelez, the parent company of Oreo cookies, used programmatic technology to purchase a 15-second spot that aired in Pennsylvania. Mondelez saw the writing on the wall. Buying TV ads based on show ratings and hoping the right viewers tune in might’ve worked well enough in the past, but it’s becoming an unsustainable business model thanks to ever-growing competition from digital channels (like online video) and new ad-buying methodologies (like programmatic).

Although there’s still much to be refined, plenty of advertisers are already reaping the benefits of buying TV spots via automated systems instead of manual negotiations with sales reps.

The Advantages of Buying TV Ads Programmatically

Programmatic buying empowers advertisers to buy TV spots based on projected and/or historical view audience data. This is truly a paradigm shift. Instead of relying on a content-only approach, advertisers can buy access to the specific group of viewers most likely to respond to their ads. Thanks to automated platforms, it’s also much easier to find the audience and/or content you’d like to target. It’s like using an online search engine instead of flipping through pages in the Yellowbook.

Once you place and run programmatic TV ads, they generate a lot of valuable data. You get detailed audience data for validation purposes and true verifications that your ad spots ran. Buying TV ads programmatically also offers real-time reporting and optimization. Instead of waiting weeks for performance metrics, you can find out right away how your campaign is doing and use automated algorithms to improve campaign performance.

Finally, prices of programmatic TV ads are competitive: equivalent to ads bought via manual negotiations. They’ll decrease going forward as market forces take over. More major players will follow ESPN, Cox Media, and TubeMogul’s decisions to make inventory available for programmatic buys.

Looking Ahead

Ad prices will decrease as more inventory becomes available for programmatic TV buys. Increased transparency of supply-side data will refine buyers’ abilities to target viewers and make the most of lower prices. The audience-buying paradigm creates valuable opportunities for buyers. Imagine a single TV spot running different ads in different households or TV sets based on viewing habits and demo data—or even running different ads to different devices within the same household. This granular targeting isn’t just possible. It’s inevitable.

Currently, programmatic TV ads are bought for future ad spots. But this will change, and soon ad slots will be available for almost real-time placement and tracking. You’ll be able to split-test different versions of ads and receive an almost immediate data response.

A New Skill-Set for Success

Buying programmatically will connect you with the right people no matter which TV programs they watch or which device they use to do it. You’ll be able to do this much more efficiently than negotiating with sellers manually. In just a few years, the skills needed for successful media placements in the TV world will mirror what it takes to succeed in the paid search or display advertising world now. Marketers with a focus on audience-based buying, making data-driven decisions, and a commitment to real-time optimization will win the day. There’s no better time than now to get on board.

References:
Sloane, Garett, Adweek, January 30, 2015, “Oreo and Ritz Mark First Super Bowl Ads to Be Purchased Programmatically”
Ng, Rany and Kattukaran, Anish, March 2015, “Evolution of TV: The Promise of Programmatic TV”
Gaon, Sloan, AdExchanger, March 25, 2015, “Programmatic TV’s Pulse Grows Louder By The Day”