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Brands shifting spend from TV to programmatic despite reservations about offline ROI

Advertisers are increasingly shifting spend from TV to online programmatic video despite having concerns about the discipline’s ability to provide an acceptable return on investment for offline sales, according to a study.

Nearly seven in ten (70 per cent) respondents to the Unruly Programmatic Video Pulse Survey revealed they had siphoned some of their TV budgets into programmatic video over the last year. Of the 500 marketers surveyed in the UK, nearly a fifth (17.3 per cent) said between 41 and 60 per cent of their TV budget was now on programmatic video, while in the US 18.2 per cent of the 500 respondents had moved similar proportions.

The shift in budgets reflects programmatic’s rapid expansion within the marketing mix thanks to the build out of private marketplaces and direct deals as well as the continued maturation of mobile and video advertising.

Indeed, three quarters of marketers surveyed said they planned to bet bigger on programmatic video in the next year. A fifth (20.8 per cent) of UK marketers said they would increase their programmatic video spend between 41 and 60 per cent in the period and in the US the percentage for the same proportion was slightly lower at 21.7 per cent.

Despite plans to steam ahead in the space, programmatic video is still proving hard to wrestle for many advertisers. Fewer than half of marketers considered their programmatic video knowledge to be "good" or "very good", while in the UK one in five (20.2 per cent) said their knowledge was “very poor” and in the US this figure was 16.3 per cent.

The lack of expertise has knocked the confidence of many marketers with only half of those surveyed comfortable executing a programmatic video campaign. Some 17.3 per cent of marketers in the UK were "very uncomfortable" running programmatic video, and in the US a similar 14.9 per cent felt the same way.

Quality of inventory was the biggest concern for marketers in the UK (17.8 per cent) and in the US (20.8 per cent), followed by poor viewability, which around 15 per cent of marketers in both regions had top of mind as an issue.

Their frustrations were made all the more apparent due to the fact that viewability is the most used KPI in measuring the success of programmatic video campaigns. In the UK, around 20 per cent of marketers use it as their key metric and it’s a similar story in the US where it is used by a quarter (24.7 per cent) of marketers.

The viewability concerns inform the wider debate around the ROI from programmatic trading and how success metrics are shifting away from clicks.

Nearly half (45.1 per cent) of marketers in both the UK and US admitted that programmatic targeting does not lead to offline sales. Just over a third (30.8 per cent) of marketers in both regions said targeting does not necessarily result in engagement with content, while 30.6 per cent for both said it lacked the scale needed to reach enough viewers to influence campaign metrics.

Marketers believe that emotional and psychographic capability would yield better targeting. Some 30.7 per cent of respondents in the UK wanted the targeting capability and US 30.7 per cent of those in the US said it as their number one improvement to targeting.

It points to programmatic advertising becoming more emotional and personal moving forward, which is not necessarily surprising given that emotional campaigns are 88 per cent more profitable than rational ones, according to the IPA.

The study was conducted in March, when Unruly surveyed 1,000 senior brand and agency marketers.