Advertising Week 2014

Agency Execs Predict Programmatic TV Will Ramp up in Coming Year

Programmatic TV Refers to Buying Inventory Using Data Derived from Automation Technology

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Doug Ray
Doug Ray

Programmatic buying -- the process of buying media using automated technology -- has transformed the way marketers, agencies and publishers buy and sell digital inventory.

TV is next, with programmatic buying accounting for up to 5% of TV buying in 2015 and more rapid adoption in the coming years, according to predictions by agency executives speaking on an Advertising Week panel called "Programmatic TV, Advertising's Next Great Frontier." That's up from only about 1% now.

However, TV and digital programmatic are different, moderator Dan Ackerman, AOL's senior VP-programmatic TV, emphasized. Programmatic TV buying is not necessarily about automating the entire transaction as it often is with digital inventory. Rather, it's better defined as buying inventory based on data derived from programmatic technology.

Panelists included: Kris Magel, chief investment officer for Interpublic's Initiative; Doug Ray, global president of Carat; and Joseph Abruzzo, exec-VP and chief exploration officer at Havas.

Though it's still in its nascent stage, most programmatic TV buying is happening in local cable and satellite markets, and national TV networks are just now beginning to extend their inventory sets, according to Mr. Magel. He said that some of the networks probably wouldn't want to be named since they're worried that the move will be perceived as commoditizing TV inventory.

Kristian Magel
Kristian Magel

Meanwhile, programmatic TV players have bigger fish to fry: ratings.

TV needs to move from traditional ratings and age-based demographics to guaranteeing impressions against specific audiences, the panelists agreed.

"Attribution-modeling solutions helped inform how digital impressions contribute to sales performance," said Mr. Abruzzo. "Once you get that, you can start to combine impressions [in TV]."

"We have the ability to understand that a program is delivering the right audience at the right CPM," said Mr. Ray. "We're not trading on that or guaranteeing impressions against those types of audiences. I would love to be the first agency, or have a client, trading against those marketing targets."

To do so, there needs to be more clarity around the value of the low-demand inventory that often gets packaged with high-demand inventory, he added. Better data and audience-based buying could change what that demand and value look like.

"From a monetization standpoint, it enables cable networks and mobile network suppliers to strap more yield from that inventory," he said. "It enables us not just to take a bunch of inventory at scale and hope it's right for clients, but actually be able to negotiate specifically for inventory that is of value to clients."

"We should head toward multiplatform [ratings], and use set-top box ratings and Nielsen data and make sure we're measuring TV, digital and mobile with one source that's as accurate as possible, across screen, age and gender," said Mr. Magel. "Then we can layer in customer targeting."

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