MBPT Spotlight: The Path to Programmatic Television—Are We There Yet?

Convergence of video viewing across screens is happening faster than expected. Consumers continue to devour new content and new devices, while advertisers and media companies simultaneously struggle to keep pace with these fragmenting audiences.

As a result, there has been increased interest recently from diverse parties about the possibility of bringing programmatic technology to linear TV—the final platform yet to be fully incorporated into the data-driven, automated world of today’s video advertising. While in the past these discussions have been very much futurist and hypothetical in tone, now advertisers, agencies, broadcasters, video distributors and technology specialists are beginning to ask what can be done in terms of programmatic TV. And as the 2015-16 TV upfront draws closer, they are evaluating the benefits of programmatic compared to the traditional way that we have been thinking and using linear television.

This enthusiasm and evaluation will ultimately spur investment and innovation in this area. However, several obstacles still remain to bringing full programmatic capabilities to linear TV. As a result, progress will come in stages, with fully developed, seamless programmatic capabilities probably still some five to 10 years away.

The good news is, we’ve crossed the first hurdle. We’ve solved the mathematical problem of how to use television programmatically. It’s the same math that is successfully driving efficiency and results for digital video advertisers every day. Yet, the infrastructure for linear television and digital video is dramatically different.

As a result, three main hurdles still remain before we can fully bring programmatic capabilities to linear TV.

• Availability of Data: Of course data is the connective tissue behind all programmatic buying. While cookie data and a vast array of other third- and first-party data is available for online video, linear TV data remains a challenge. A variety of companies, as well as multichannel video programming distributors themselves, are beginning to solve for this problem by using set-top box data. The key now is to make this data actionable and transferable across devices.

• Systems Unification: The technical requirements for bringing programmatic capabilities to linear TV feeds are complex because of the various distribution channels that bring video into the home. There are many moving parts and currently a lack of common standards across the multitude of participants. Systems aggregation is incredibly important if we’re going to provide a singular solution for advertisers.

• Cross-screen Measurement. Measurement is the final challenge as we move into programmatic TV. This includes assessing the validity and applicability of data that will be necessary to deliver efficiency, effectiveness and ROI. In addition, we cannot think of programmatic TV as removed from video viewing across all devices, and therefore finding a way to holistically measure cross-device campaigns using a variety of data sources is imperative.

As the industry works toward solving these challenges, can advertisers realistically utilize programmatic TV buying in 2015? For some brands, there are opportunities available. In fact, early forecasts suggest that programmatic television spending could approach $1 billion this year, primarily delivered in local inventory, and as much as $3 billion in 2016.

These numbers may sound small, but it’s important to remember that a legacy industry such as television advertising will begin to move in inches, not miles. Within the linear television buying groups, we will see an evolution of the business, not a revolution. And this evolution is taking different forms, encompassing a variety of media strategies simultaneously.

For instance, Addressable TV, one way into programmatic TV, is now more readily available and scalable. Addressable TV, which sends targeted ads to individual households, is a natural complement to data-driven digital video campaigns. This year, TV buyers will begin to evaluate how much they can direct into addressable TV for applicable brands, and as more inventory becomes available, budgets will begin to evolve in a natural progression.

Another example of this evolution is the integration of digital video technologies into legacy television buying systems, providing the option to seamless integrate digital video into campaigns, and bringing automation to traditional workflows. And yet another example is the huge rise in private marketplaces between media buyers and sellers, which maintains relationships between agencies and the media companies, and could serve as a model for future programmatic TV buying.

Just as programmatic video is very different than programmatic display, programmatic television too will follow its own course. Fortunately, TV and video are close cousins. In the end, programmatic television, like programmatic video, requires fluid data, flexible media and a fusion of technologies that allows advertisers to plan, buy, execute and measure in an automated, data-driven, cross-screen manner. When the few remaining hurdles for programmatic TV are overcome—and they will be—those technologies truly built for video in all its incarnations will be ready.

Scott Ferber has spent his career utilizing mathematics and data analysis to build profitable businesses and products. With the goal of bringing the accountability of digital media to the expanding video space, he founded Videology in 2007. Its video advertising solutions platform is now used by some of the world’s largest marketers and media agencies to connect brands with their targeted consumers.