Programmatic advertising is growing and evolving rapidly. One recent report from IDC and The Trade Desk projects that programmatic will constitute 13% of spending in linear TV advertising by 2019, growing from $50 million in 2014 to $11.4 billion in 2019.
Even with the rapid adoption of TVE and OTT, and the growing penetration of video on demand services like Netflix and Hulu, linear television offers the largest quantity of valuable impressions for advertisers looking to programmatically target audiences with video. This fact isn’t lost on the major agency holding companies—all of whom have advanced TV groups looking for programmatic solutions for linear TV.
It also is driving major ad tech development roadmaps at leading demand side providers on the digital side. TubeMogul, The Trade Desk, Tremor Video and One by AOL, just to name a few, are in the late stages of launching multi-screen programmatic video solutions.
On the supply side, the industry is seeing new partnerships daily between MVPDs, cable networks and broadcasters and supply side platforms and ad tech firms.
Significant challenges still exist. The backbone of linear television is largely built on old technology and relies on measurement and reporting systems that model impressions for planning and as-run data. Things are changing quickly.
How do the major players in the digital programmatic industry efficiently ingest the valuable audience impressions from linear TV? In the short term, it’s likely a patchwork of new and old technology that leverages existing measurement and reporting systems. In the long-term it will require replacing outdated copy distribution networks and slow reporting infrastructure. The future also needs to accommodate campaign planning, ad delivery, optimization and real-time reporting across all devices and platforms.
Here are five things that the industry can tackle today to pave the way for programmatic in the future, and accelerate adoption of programmatic today:
1. Change the linear television advertising currency from GRPs and spots to audiences and impressions – Efficiently reaching audiences is perhaps the greatest value of programmatic. Traditional media planning pushes advertisers to programs that have the highest ratings and reach. Programmatic finds those same audiences more efficiently in different dayparts and in different programs. To realize the biggest benefits of programmatic, buyers need to think differently about how they plan.
2. Integration with traffic and billing systems to provide real time visibility of available inventory and improve reporting – If we’re going to ask media planners and buyers to leverage programmatic platforms to reach audiences in new places, we need to be willing to provide them with better data points to analyze the success of their campaigns, and optimize their buys. That technology and data simply does not exist in today’s linear TV world. Simple integrations, and a few rule changes on the supply side, could provide planners and buyers with valuable information that would accelerate adoption of programmatic television.
3. Integration with agency planning systems – Rather than disrupt the existing media planning environment with new tools and platforms, the industry would benefit in the short-term through integration with existing platforms like Strata and Media Ocean.
4. More transparency and visibility – Much of the skepticism in the marketplace comes from a lack of transparency and visibility. Lack of visibility is creating fear of channel conflict on the supply side. And, lack of transparency of inventory and reporting is creating doubt on the demand side. Creating more comfort through transparency and visibility will advance adoption on both the supply and demand side.
5. Better measurement of audiences – The industry is still wanting for a cross-screen, cross-platform measurement platform. As video across all screens, and on demand at any time, becomes the standard, the industry needs to settle on a better way to plan and measure those campaigns. Hopefully, the merger of comScore-Rentrak as well as Nielsen response to the merger will lead to better cross screen measurement.
Derek Mattsson is President of programmatic advertising company placemedia, a subsidiary of Viamedia. He was co-founder and CEO of Utah based Vehix.com, acquired by Comcast, and also served as regional vice president for AT&T Media Services.