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NYC TV Week: 5-Plus Years for Programmatic TV Tipping Point

Programmatic will take time to reach a tipping point in television, with a number of panelists at the Advanced Advertising Summit arguing that it might take five years or more for programmatic to be playing a major role in the TV ad business.

“A year ago I would have felt [a tipping point] would be coming sooner, but now I see progress slowing down as the complexity is settling in,” said Marianne Gambelli, executive VP, chief investment officer, Horizon Media, who felt it would take over five years to reach the tipping point.

Eugene Becker, senior VP, platform strategy, eXelate, A Nielsen Company, added that it was difficult to predict when it might be reached, but felt five years was a more reasonable figure than two or three years, in part because of the infrastructure for addressable advertising wasn’t well developed.

During the “Programmatic Progress” panel in New York on Oct. 20, all the panelists stressed, however, that the progress that was being made on a number of fronts and some panelists noted that considerable business was already being done.

When asked when programmatic might be handling 50% of the business, Brendan Condon, CEO, AdMore noted that depended on whether that point was defined in terms of the number of transactions or dollar amount.

“You will see a huge volume but smaller dollars,” Condon said. “Big events [will] never be programmatic,” because the networks will want to work closely with major advertisers and marketers to ensure the success of the programming and campaigns.

Condon said that Admore now has 1,200 media partners, including local stations, local cable and MVPDs. “We are seeing interest in reaching targeted audiences,” he said.

Panelists noted that national advertising was taking hold quicker, given the complexity of the local market. “National is easier but local will need and benefit from it more,” Condon said.

Panelists also noted that there has been considerable progress on the front end, with data and other systems. “Working on data side we are quite ready,” said Becker.

While much of the promise of programmatic has revolved around efficiencies, Gambelli noted this hadn’t translated into fewer staff. “We are hiring more people to handle this because it is more complex,” she said.

She also stressed that the focus shouldn’t be exclusively on efficiency: “I hope we don’t lose creativity. We hope we don’t swing too far and hire a lot of math scientists and forget what this is all about” which is heavily dependent on creativity.

Concerns were also expressed about the number of players. “There are all these middlemen delivering ads,” Gambelli said. “Everyone takes a fee” and there are questions about “who is going to pay for this."

The panelists also noted that programmatic in the TV industry would take a different shape than it has in digital. Brent Gaskamp, senior VP, corporate development, North America at Videology doubted that real time bidding, which is widely used in digital programmatic systems, would take hold anytime soon in TV.

“There is an assumption that TV will converge on digital,” Becker said, who added that the digital model “has a lot to offer but it is far from ideal. I think it is very dynamic and evolving and I think TV will take on a standalone model rather than replicate digital.”