Prepare for Programmatic, OTT and Linear Television

Spending in programmatic TV is expected to triple in 2017 to $2.16 billion, and grow to $4.43 billion in 2018, according to eMarketer. With huge live TV events ahead like March Madness, we’ll continue to see the potential value of programmatic TV buying and possibly the missed opportunity as well.

The NCAA Tournament always attracts tens of millions of viewers, especially college age viewers watching games over an extended period of time on local and national TV channels. For media buyers, it is an amazing opportunity to capitalize on the cord cutting audience, which is predominantly in this demo. New streaming verticals and heightened interest, coupled with a key understanding of programmatic TV, could mean huge wins -- and not just on the court.

Tournaments like March Madness also open the door to one of programmatic TV’s greatest strengths: local broadcast buying. It’s no surprise that local market viewership of tournament games gets a boost when a “home market” school is playing. These stations sell spots on the same premium programming as the national networks and open up a previously overlooked audience to the TV ecosystem. Local broadcast offers greater geographic focus, and combined with programmatic, enables more efficient targeting and measurable results.

Also: Sinclair Sees Opportunities in Programmatic Ad Sales

In a perfect world, media buyers should be able to immediately access premium audiences at a national and local level, across over-the-top (OTT) connected devices, linear, and streaming TV video, in one simple programmatic buy.

For instance, Gatorade should be able to instantly buy men 18-25 watching the Kansas Jayhawks and that ad can be set to show up on every screen, through OTT content services, set-top boxes and streaming devices. They should be bought and sold together. With this convergence, advertisers can extend their reach across platforms in cost-effective ways while gaining a deeper understanding of, and the ability to target, the person who logs into an OTT account via any connected device.

However, this isn’t a perfect world, and media buyers are losing opportunities to leverage these premium audiences. The issue isn’t demand: as more people subscribe to the likes of Hulu and Apple TV, OTT connected devices are booming with ad revenue forecasted to rise to $31.5 billion by 2018 from $8.5 billion in 2015 (The Diffusion Group). In today’s connected world, OTT’s main obstacle is still being disconnected from the rest of the television ad industry.

Also: Sluggish Programmatic TV Could Finally Pick Up Steam

Programmatic is Prime Time

Already a major aspect of the digital trade, programmatic buying is proven to increase sales and marketing ROI. As we continue to lay the foundation for its success, programmatic data will increasingly inform linear TV advertising, which garners more than $70 billion per year.

Programmatic television promises media buyers a way to infuse their linear TV buys with audience targeting that adds effectiveness beyond typical demographics and ratings points. It improves upon traditional standards by using broadcaster’s set-top-box data to identify desired audiences, and purchase TV spots against these audiences programmatically. Advertisers are given both increased control and new levels of transparency, while adding billions of monthly television ad impressions to the billions of impressions that are already being delivered nationally.

Also: NCAA, Partners Raising OTT Game for March Madness

OTT and television advertising should be universal

From media buying agencies to global media empires, executives are looking for new ways to create cross-platform opportunities.

These days, leaders of major TV companies often discuss the need to make their shows available to audiences on every screen possible, whether broadcast, cable or the burgeoning OTT market. Not surprisingly, these executives also want to deliver those audiences to advertisers seamlessly, via the best available targeting technologies, including programmatic TV.

Almost everything bought on OTT devices today is done so directly or on an Insertion Order basis and every seller has a different set of rules that buyers must abide by. In order for us to shift away from this kind of fragmented buying, broadcasters must buy into the idea of programmatic television, thereby allowing dynamic ad insertion to occur at every level.

For this transition to happen, we need standards across the television advertising industry that outline the programmatic trade of TV spots. The methodology should be in place to help deliver exact audience measurement and targeting across the board, but it’s up to individual broadcasters to determine these reach metrics across devices and it’s up to the buy side to select where and when. If we work together to define the standards, cross-screen opportunities will become a reality as digital video, OTT and linear television take steps to come together in one programmatic media buy.

These types of key TV moments should be used as an opportunity to usher in a new way to think about the buying and selling of television ads. One that brings together cross-screen opportunities and television buying into one, universal media buy. As legacy TV advertising continues to change from tune-in to time shifted on OTT, this kind of convergence could be just the thing we need for its long term growth.