TV’s Path to Programmatic: Blurring Offline + Online

October 20, 2017

Abby McNabb

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Despite the constant digital evolution, television still accounts for over one-third of ad spend in the US and remains a crucial medium for driving awareness en masse. So how will TV keep marketers investing for the long haul? By blurring the lines between offline and online through programmatic, TV can re-emerge as a relevant and essential part of the media mix.

Marketers continue to invest in TV

Despite the evolution of digital advertising and ever-growing digital media budgets, television still accounts for over one-third of ad spend in the US and remains a crucial medium for driving awareness en masse. One spot on a major network during primetime programming can hit millions of viewers in 30 seconds – a feat few other channels can come close to. As Rich Lehrfeld, Senior VP – Global Brand Marketing and Communications at American Express points out, TV as a traditional medium is still important. “When we run a heavy TV schedule, we see a lift in sales and product awareness. We need to run two weeks of digital to get the reach of one day of broadcast.”

Television combines visual and audio elements on the largest screen in the home, creating a high-impact experience and the perfect canvas for brands to tell their story. Linear TV audiences are more attentive than users watching video on their phone, tablets, or computers. This helps drive long-term ad recall, which directly impacts ROI and drives KPIs. And, according to eMarketer, even as digital video channels are driving more and more viewers towards cord-cutting, linear TV still dominates share of video viewership time at 78%, compared to digital video at 22%.

The Limitations Of Linear TV

Although TV may be the best channel for grabbing the attention of a mass audience in a short timeframe, there are cases where TV’s limitations outweigh its benefits. TV is purchased based on standard demographics (W25-54, A18-34, etc.) and traditional buying methods do not allow for granular targeting. For brands with niche audiences, TV can deliver messaging to unqualified audiences, wasting impressions.

Planning and buying linear TV is also a big undertaking. Usually, major advertisers plan a yearly TV schedule all at once, and buy inventory from major network upfronts. This process can take months and requires a lot of back and forth between planners, buyers, and networks. Legacy buyers also get the first look at the best inventory and have the lowest rates, which makes it hard for new or smaller players to compete.

Lastly, measurement of television is very limited when compared to digital measurement opportunities. Market testing, pre-post analysis, and media mix modeling can prove the value of TV, but results are not finalized until weeks after a campaign has ended. This makes it hard for marketers to understand how their campaigns are performing in real time. And even when measurement results become available, most TV budgets are locked in and cannot be cancelled, which inhibits advertisers from making adjustments throughout the year based on performance.

TV is Evolving to Fill Gaps in Capabilities

As marketers get smarter about targeting and measurement across digital media channels, TV often appears stuck in the past. However, with the advancement of data collection and technology, there has been an opening for TV to evolve. Programmatic TV (PTV), or the process of buying audience-based advertising inventory through an automated system, is advancing television media buying in a way that mirrors digital buying methods.

Programmatic TV usage

As programmatic platforms build out their advanced TV offerings, planning and buying is getting more automated. Technology is doing the heavy lifting of TV planning and beginning to automate aspects of the buying process. Some networks are even building automated feeds that allow advertisers to see available inventory in real time and purchase that inventory programmatically. Automation cuts lead times, freeing up time for buyers and allowing advertisers to get up and running much quicker.

Instead of defaulting to demo-based buying, advertisers are now able to get more granular with TV targeting. Programmatic platforms allow advertisers to index viewing behavior against third-party and first-party data, and build TV schedules targeting different buying behaviors, viewing behaviors, and psychographics.

Addressable TV goes one step further and uses data to target at the household level. With addressable TV, advertisers can leverage third-party or first-party data to identify and reach individual households based on purchase behavior, income levels, or household makeup. In practice, this means that two neighbors watching the same live TV program on the same network at the same time could receive different advertisements. This is very exciting for advertisers with nuanced targeting needs.

Programmatic TV Has Not Been Fully Realized

Although PTV is filling many gaps marketers face with linear TV, it still has a ways to go before it catches up to alternative programmatic buying methods. Programmatic TV still requires some manual work and takes more manpower than activating a digital campaign. Currently, there is not yet an open exchange for PTV inventory and buyers often must go to a mix of networks, programming distributors, and cable providers to build their plans.

Real-time bidding is another feature not yet available for PTV. Programmatic platforms can layer various data segments across digital efforts; however, data is still very fragmented in the PTV space. And, although addressable TV tackles household targeting, it comes at a premium price, with limited inventory and requires additional work from all parties involved. Media planners also need to take into consideration business rules, supplier minimums, market conditions, and more, which are generally not accounted for in PTV platforms.

What’s Next For Programmatic TV

Though programmatic TV is still in its infancy, the future looks bright. Technologies are becoming more sophisticated every day, pushing PTV towards true automated planning and buying. In the not-so-distant future, TV planners will be able to enjoy real-time bidding and optimization, robust measurement options, and precise targeting, similar to what is afforded through programmatic display buying.

Soon, marketers will be able to roll in TV alongside display, online video, social, and search, creating a single platform for cross-screen planning, buying, optimization, and measurement. When technology catches up to the vision of programmatic TV, it will be easier than ever to manage across channels and measure the impact different media types have on one another.

Is Programmatic TV Right For You?

For digital marketers, adding TV to your media mix can be a daunting prospect. TV affords much less control over campaign results and is generally more difficult to measure in relation to your digital goals, such as leads. But just because the impact of TV is harder to estimate does not mean that it is not effective.

TV can also influence other channels. According to Media Post, “TV ads with small audiences can produce detectable search spikes for the advertised brand, with 75% of incremental searches occurring within two minutes.” This direct and measurable impact makes TV an essential component of many media mixes.

When paired with other digital tactics, TV’s impact can be amplified. A report from the Advertising Research Foundation indicates that ROI increases when more channels are added to an advertiser’s media mix. TV, along with digital, drives the most significant ROI – 60% higher than other channel mixes.

The arrival of programmatic TV is making it easier for digital marketers to test television messaging against precise audiences without the need for massive budgets or complex, manual planning. As advertisers connect the dots between online and offline audiences, television is able to tout the same targeting, automation, and measurement capabilities that were once limited to digital channels. As the line between offline and online is becoming less clear, the future of media buying is moving toward an omnichannel approach, with programmatic TV as one of the first steps.

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