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Programmatic ‘Tipping Point’ Still Five Years Out

NEW YORK — Programmatic advertising 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 the technology to play 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 vice president and chief investment officer at Horizon Media, who added she now believes it could take more than five years to reach the tipping point.

Eugene Becker, senior vice president of platform strategy at Nielsen-owned eXelate, said that while it’s difficult to predict when it might be reached, five years was a more reasonable figure than two or three years, in part because the infrastructure for addressable advertising isn’t well-developed.

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

Asked when programmatic might be handling 50% of the business, Brendan Condon, CEO of AdMore, said that depends on whether that point is defined in terms of the number of transactions or the 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 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 is taking hold more quickly, given the complexity of the local market. “National is easier, but local will need and benefit from it more,” Condon said. The panelists also noted considerable progress on the front end, with data and other systems. “Working on the data side, we are quite ready,” Becker said.

While much of the promise of programmatic has revolved around efficiency, Gambelli said that had not translated into reduced staff. She also said the focus shouldn’t be exclusively on efficiency: “We hope we don’t swing too far and hire a lot of math scientists and forget what this is all about.”

George Winslow is technology editor of Broadcasting & Cable.