Bingeing, Bundling and real time buying: The new world of TV

In Digital Advertising, 2014 has been all about programmatic and the industry continues to grow at a rapid pace on all fronts; display, mobile, social and video.

Bingeing, Bundling and real time buying: The new world of TV

There is not a week that goes by where there is not a significant news story about a new merger, acquisition, tech integration or strategic direction. This year there has been a clear focus on transparency, the use of data to buy audiences, viewability, brand safety, mobile, cross channel tracking, private market place deals and the growth of video budgets. The last two points are something I would like to focus on as a significant opportunity moving into 2015.

Binge and television are not words that could have gone together 20 years ago. Today, services such as BBC iPlayer, 4OD, Netflix, Roku and Amazon Instant have made TV binges part of our daily lives. And as viewers move further and further online, the way we consume content has massively shifted.

Services like these, let’s call them ‘advanced TV’, address our need as consumers to discover new products and services as well as our craving for personalised recommendations. But their success doesn’t just mean viewers can see any show they want, when they want. It also represents a new reality in the way that TV companies make money.

While none of this is news to those of us in the advertising industry, I want to be clear about my bias: I come from the digital advertising space—programmatic and real-time bidding, to be specific. And I believe that all advertising channels, including television, will be made available through programmatic channels within the next few short years, possibly sooner. It is not a matter of if, but of when.

This is because the value of a traditional cable or satellite bundle—where users sign up for hundreds of ‘premium’ channels, many of which they’ll likely never watch—is under threat. In a few short seasons advanced TV has taught consumers to expect and demand à la carte options, and network broadcasters such as BBC, Channel 4, Bskyb and Virgin Media have listened and begun to take action.

The old 'more is more' bundle model is dying because it stands in direct opposition to a viewer’s ability to pick and choose shows. And as the bundle goes, so goes TV’s legacy system where, for decades, most advertising has been negotiated via complicated deals where commercials were sold in bulk weeks, months or years ahead.

With advanced TV, ads can be bought and sold in real-time, as well as in advance auctions like before. But unlike before, those auctions are run on exchanges that look more like the NASDAQ than the deal table at Sterling Cooper Draper Pryce of 'Mad Men' fame. (Though in fairness to Harry Crane and his giant computer, media buyers have always understood that technology could be used to increase transactional efficiency and make ads more relevant and targeted.)

To be clear, those of us in advertising—especially RTB—know that speed is not a replacement for personalisation. In most TV advertising today, commercials are still bought for specific channels, specific shows and specific spots, but they are not tailored to the viewer. As digital players converge with the TV business, advertisers have come to realise that ads can be more relevant and targeted than ever before.

For example, in a personalised scenario, each household in a street in London might see a different ad during the commercial break of The X Factor. In fact, it can get even more granular than that: within one Bingeing, Bundling and real time buying: The new world of TV household, mum might see an ad for a new car when she watches the show on TV, while Dad might see ads for a latest golf clubs when he streams the same show on his laptop.

The point is that ads will be much more relevant because the future is about one-to one impressions, not mass demographics. TV advertising has always been about reach and branding. But in a digital world, it can do that and more.

Programmatic advertising has created new winners and new losers, and entire companies are dedicated to making this change in TV advertising. According to Nielsen, more than half of global advertising (57 percent) is spent within television.

As the concept of television evolves into advanced TV, The Trade Desk is poised with the world’s most sophisticated agencies and tech partners to seize that opportunity just as we did when publishers brought inventory into the RTB marketplace a few years ago.

The speed of this paradigm shift is accelerating, and the opportunity for advertisers—and viewers—is immense.

James Patterson, client services director EMEA, The Trade Desk

Tel: +44 (0)203 008 4351

Email: sales@thetradedesk.com

Web: www.thetradedesk.com

Twitter: @TheTradeDeskInc

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