On the Ad Horizon: ‘Programmatic TV’

The upfronts and other traditional TV ad-buying processes won’t disappear overnight, but a popular, relatively automated “programmatic” method of buying and selling ads for online video could soon extend a bridge to the television.

In the online video world of programmatic advertising, vendors, advertisers and content suppliers have woven together a Web-based framework that relies on a set of automated tools that handle the buying and selling of ad inventory.

After starting out as a model that enabled sellers to quickly move unsold inventory, the efficiencies of the data-driven, programmatic process have spread its use to more targeted, premium-level ad-buying opportunities.

Although the notion of “programmatic TV” has become a new buzzword in video advertising circles, it’s still a loosely defined term and concept at this nascent stage.

“There’s nothing agreed upon in terms of what is and what counts as programmatic TV and what doesn’t,” Jonathan Bokor, senior vice president and director of advanced media at MediaVest, said. “Those are questions that remain to be answered.”

Also still unanswered is how rapidly programmers will take to the idea of selling and how much inventory they will set aside to make it work.

But even in these early days, an array of ad tech vendors, including Adap.tv, Placemedia and AudienceXpress, among others, are pursuing programmatic TV strategies in the hopes of spawning a new marketplace.

Dan Ackerman, senior vice president of programmatic television at Adap.tv, said the idea is starting to take hold with agencies on the buy side, and cable networks and multichannel video programming distributors on the sell side as consumer behavior shifts to TV Everywhere apps and viewing on multiple platforms. He believes the programmatic method could be extended not just to linear TV, but also to video- on-demand and targeted/addressable advertising.

The pay TV industry “needs the technology to monetize those audiences,” Ackerman said. He said he expects the adoption rate of programmatic methods for TV advertising to accelerate in the next 12 months. “The desire from the advertising community is there to start to bring that programmatic process to TV.”

For now, he said, most of the action is occurring between ad agencies and multichannel video providers, because they have access to data from set-tops, as well as from thirdparty sources such as Rentrak, TiVo Research and Analytics and Kantar Media that can tie into the programmatic process.

That data offers a “prime source” for making ad-buying decisions that extend beyond just age and gender, he said.

But there are some technical and scalability challenges ahead. Ackerman said the industry will need to build standards and application programming interfaces that enable cross-platform interconnections.

Although programmatic TV is in its embryonic stage, consider it on cable’s video advertising radar. “It’s something that has gotten some attention here,” Bokor said. “As an agency, we embrace innovation. If there’s an innovation on how to buy and sell TV advertising, we’re going to look at it and evaluate it on behalf of our clients.”

The potential promise of programmatic continues to draw in vendors that work with some of the largest pay TV operators. Synacor, which sells ads on customer Web portals it develops for companies like Verizon Communications and Charter Communications, is adding datadriven programmatic capabilities to its platform through a partnership with a company called BlueKai.

The idea is to automate the process while also giving advertisers the ability to deliver more targeted, relevant messages, Ron Bernstein, Synacor’s senior vice president of ad sales and operations, said.

He said Syancor has talks underway with advertisers and expects to have the programmatic capability widely rolled out on its browserbased platform by the end of the first quarter.

Synacor intends to extend programmatic opportunities to TV Everywhere apps for mobile devices, Bernstein added.