The multi-billion television advertising business is on the path to transformation. Following the steps of display and mobile ads, the television industry is increasingly starting to get more curious about the possibilities programmatic media buying has to offer. Although in its very early stages, Programmatic TV is already showing some impressive results. According to report from IPG Mediabrands' Magna Global, Programmatic TV will represent 4% and $2.5 billion of U.S. TV budgets in 2015 with significant increase to 17% and $10 billion of TV budgets by 2019.
What is Programmatic TV?
Programmatic TV, as the name suggest is an automated process of buying and delivering ads against TV content. It applies the core principles of the digital programmatic advertising – data-driven strategies and enhanced audience targeting. Programmatic TV involves not only the traditional set-up boxes but all digital TV ads published across the web, mobile devices, and connected TVs.
Who can benefit?
Everyone. It has the strong potential to be a win-win situation for audiences, advertisers, and the television industry itself. Thanks to the data-driven model and the instantaneous method of ad delivery, brand advertisers will be able to refine their targeting on one of the largest platforms in the world. Instead of reaching particular set of the audience based on assumption and TV show ratings, advertisers will be able to adopt audience-centric approach in their strategies and enhance their consumer engagement experience just like they can do this now in the programmatic display advertising. The audience on the other hand will be able to receive more relevant to their interests and needs content. Ok, it is true that we all use the commercial break to get something sweet from the kitchen but still, with programmatic TV we will have more chance to escape the repeated irrelevant ads that follow us on every channel.
What types of Programmatic TV there are?
The Magna report outlines two types of Programmatic TV: audience buying and household addressable. Audience buying represents the majority of the buying transactions and is focused on targeting specific users regardless of where the consumers may be watching TV. In the opposite end is the household addressable, where the method is highly concentrated on targeting specific demographics demographics via local buys served through cable operators' set-top boxes (as the report states)
What to expect next?
The interest in the programmatic possibilities will only continue to rise. What we can state with certainty is that the next few years ahead of us will show influx of AdTech innovation and adoption of technologies across all sectors. Programmatic TV will be a big game-changer in the field of advertising. It might take awhile for it to scale-up with its display bigger brother but it still represents an opportunity that shouldn’t be overlooked. Neither by advertisers, nor by the TV industry itself.