The term "programmatic buying" can be somewhat uncomfortable to the traditional media buyer. Everything they’ve been practicing and preaching their entire careers is coming into question when discussing buying TV audiences via CPM (cost-per-thousand) vs. programming and GRPs (gross rating points).
At present, TV ad buying is one of the last frontiers predominantly untouched by an automated buying system. And for the most part, traditional media buyers, as well as advertisers, are not yet familiar with the benefits of this buying process and the value it can provide to television. However, there is an impending shift towards a media world that is platform agnostic — meaning digital video could be distributed across all screens the consumer is viewing, such as connected TV, cable, smartphones and tablets. The goal is to have a unified analysis of impressions, conversions and attribution across every platform so buyers and advertisers can be smarter with their dollars.
I’m a firm believer that programmatic TV has a very promising future, however it is still very much in the evolutionary phase. Programmatic advertising can be simply explained as the data-driven automation of audience-based advertising transactions. With programmatic, you’re buying a specific audience. The idea is to buy across EVERY screen where media is being consumed. It’s important to note that true programmatic is currently only available in digital video. For example, the ability to buy ‘x’ impressions targeting ‘x’ audience in real time cannot be done yet in the linear world where traditional buyers rely on Nielsen to tell them who was watching once the show has aired. In a perfect programmatic world, media buyers will be able to buy media across TV, digital video, display and social through one single platform. The future of programmatic TV is already offered through local cable companies and satellite firms, called addressable TV. This allows the buyer to buy spots targeting a specific audience with ads served through cable boxes to households that fit the target audience.
The benefits of programmatic TV:
- Automated Buying. It speeds up the buying process, with fewer manual actions. No haggling with sales reps and awaiting rate approvals and clearance via email. CPM’s are pre-determined and programming/time periods align with the target demographic’s viewing habits.
- Data-driven targeting. Data is an integral component of programmatic. It allows for a more accurate level of audience targeting vs. targeting the entire DMA. Ad delivery will be more precise. Ads will reach the target demographic specifically instead of an entire DMA which allows for a lot of wasted impressions.
- Cross-screen measurement. KPIs for TV optimization will be a unified GRP including digital metrics like viewable impressions and conversions. Currently, buyers are forced to review impressions, CPM’s, CPP’s and GRP’s, so it’s impossible to compare apples to apples. This will allow for a more consolidated metric to measure performance.
- Unified campaign management. One single platform for buyers to plan, buy, measure and manage their ad campaigns. A more efficient way than utilizing multiple platforms to buy across all mediums. One consolidated platform to purchase across mediums will allow for combined impressions and reach and frequency for the entire campaign.
- Real-time optimizations. Faster performance metrics within flight vs. waiting until the campaign completion. Immediate ROI vs awaiting Nielsen overnight ratings to prove performance of spot placement. Impressions can be shifted in real time to further eliminate waste upon the wrong target.
The goal isn’t to shift all TV advertising to programmatic, but to shift it to where it makes the most sense.
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