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Will the Future of Ad Buying Be Automated?

people watching TV
(Image credit: Getty Images)

There is little that the COVID-19 pandemic has left unaffected, and television advertising is no exception. Trends toward automation and addressability, which were already being felt under the surface, are only accelerating, and there is a renewed focus on updating how TV advertising is bought and sold to limit the impact of the ongoing pandemic on broadcaster revenues.

Maria Myrasova

Maria Mryasova (Image credit: IPONWEB)

The onset of the coronavirus at the beginning of the year saw two key changes to viewing and content production. TV consumption increased, combined with a greater demand for streaming services (and therefore OTT ad targeting). A host of data points showed TV consumption continuing to evolve towards OTT/on-demand channels, reflected by broadcast VOD viewing in the United Kingdom being up 45% year-on-year.

But as the world went into lockdown (where it is once again headed), and watched more TV, the production teams, actors and sports teams that generate the content were also placed on pause. This has had secondary effects on the release dates on many anticipated TV shows and movies with additional restrictions on how they will be produced. Many sports have been unable to move forward with their normal cadence (the Olympics in particular), which has further impacted inventory availability. 

Adapting to an Altered Reality

The new reality forced broadcasters to adapt production, programming and advertising schedules fast. Live sporting events and new programming were put on hold in favor of older, higher-performing inventory. This meant that the advertisers who were relying on and investing in the canceled events now had to redirect their advertising budgets elsewhere, while also changing their creative messaging to be more culturally and socially appropriate for the times. This opportunity cost sits with the broadcaster. 

Moreover, these delays continued down the production supply chain (as well as pushing back this year's upfronts), meaning many of next year’s anticipated programs will not be ready, putting further future advertising at risk.

Both sides acknowledge the impact that the pandemic has had: the traditionally TV-heavy advertisers are asking for more flexibility on performance and spend while utilizing new tools and tactics to reach their audiences, while broadcasters need to replace the postponed ad campaigns on the fly and at lower price points. These reactions to the current climate have created a need to be flexible and act fast which has boosted the scattered buys.

The scattered buys that were considered lower quality by many are now an attractive market for advertisers who wouldn’t generally spend on TV. Both linear and addressable remnant inventory has historically had problems delivering reach at scale. However, without upfront reservations constraining supply, a
lack of inventory is no longer an issue. Scattered buys present an opportunity for broadcasters to quickly fill airtime while maintaining the incoming revenue, albeit at lower rates. 

Because the time-to-campaign-launch is critical, broadcasters also need to find a way to speed up the process of negotiating, contracting, planning and scheduling that usually take a significant number of weeks. This is where innovations in platform automation and coordination become essential. 

Ad sales, ad operations, programmers and media planners on the broadcaster side now have to synchronize activities to ensure fast-to-air campaign launches, while also managing costs and ensuring the inventory isn’t undersold. One solution to this rather complex problem is to use a unified supply and demand management platform. By monitoring the inventory that is available for selling versus inventory that is already booked, broadcasters can analyze and control the prices based on the delivery and demand for a specific program in real time, driving greater yield. 

Automation of the campaign booking process on the demand side could also solve allocation issues with remnant and guaranteed delivery by providing an overview of the best available rates for the interested programming and audience. Sitting on top of existing systems, easing the ad sales and ad ops workload, automation technology can create a more holistic view of the overall available inventory and open up a new demand channel for the first-time TV buyers that are looking to increase their reach in digital and are used to a simplified buying process. 

An Automated Future

Post-pandemic, the TV advertising ecosystem will come back with new content. It will also return with new automated systems, such as predictive inventory pricing that enables weighted campaign allocation across channels, content packages analysis and ad placement optimization that optimize both yield and ad spend, as well as competitive and search intelligence integrations to help drive monetization efficiencies. While it does not look like the upfront and the scatter buying models are going to disappear, how they are used by both major advertisers as well as brands that are new to TV will need to be reassessed. 

Maria Mryasova is director of advanced TV solutions at IPONWEB, leading a team focused on enterprise advertising technology solutions for cross-channel audience buying and selling in connected TV, linear and digital.