Human-sold TV inventory does not equate to premium inventory.
For now, the above statement is false. However, within the next five to ten years, networks and broadcast groups will make available more of its inventory via programmatic means; premium inventory included.
National networks and broadcast groups currently sell between 70 and 80 per cent of their yearly inventory directly to brands and advertisers via upfronts. The remaining 20 percent is reserved for local affiliates and multichannel video programming distributors (MVPDs) such as Verizon and Time Warner.
This 20 percent - along with opportunities in the over-the-top and web TV space - is currently what is in play for programmatic TV.
At the forefront of these changes are TubeMogul, a demand-side platform (DSP) and WideOrbit, a sell-side platform (SSP). Late last year, the two companies entered into an exclusive partnership, making it easier for broadcasters, agencies, and brands to begin this transition.
With programmatic evolving quickly, and a mix of trepidation and lack of understanding from all parties involved, TubeMogul is in the midst of a five-month-long “Programmatic TV Roadshow,” designed to educate partners and those interested in the space.
For more on the roadshow, we spoke with Keith Eadie, TubeMogul’s Chief Marketing Officer:
Found Remote: Why is TubeMogul embarking on this roadshow?
Keith Eadie: The goal of the roadshow is to help educate marketers about how software can help automate their TV ad buys. To accomplish this, we’ve organized events in eight different cities that include presentations from our executive team, along with panels featuring industry thought leaders, who will help advertisers understand both the opportunities and challenges in today’s programmatic TV landscape.
FR: What is the greatest misconception about the programmatic TV marketplace?
Eadie: The biggest misconception about programmatic TV - similar to the misconception that plagued programmatic digital – is that the majority of inventory available is low quality, late-night, remnant ad slots sandwiched between infomercials. In fact, it’s actually the exact opposite – in a recent study, we found that 29 per cent of TV impressions purchased through our software appeared during primetime viewing hours. This corroborates an earlier test with ran with 3M, in which 87 per cent of total impressions ran on top-10 networks and nearly one-third of those ran during primetime.
Perhaps most significantly, Mondelez International used our software to buy the first-ever broadcast TV Super Bowl ad programmatically – and DigitasLBi similarly secured airtime around the Oscars through software.
FR: Right now, between 70 per cent and 80 per cent of inventory is sold at network upfronts. How do you foresee this changing in the next few years as more networks embrace programmatic?
Eadie: We don’t foresee that changing in the next few years - the upfronts certainly aren’t going anywhere anytime soon. What we do believe is that programmatic will enable advertisers to automate scatter and local market buys – they’ll be able to plan, buy, and optimize in a matter of days, not weeks or months, and they’ll be able to more effectively reach strategic audience targets that are more granular than age and gender. On the flip side, programmatic will help networks and broadcasters realize more value for inventory for which there was previously less demand and stem the flow of advertiser dollars from traditional TV to digital channels.
FR: Sellers are worried that programmatic will result in lower CPMs. Is this worry unfounded?
Eadie: Yes – but it’s understandable how those concerns arose. Programmatic TV is not the same as programmatic digital – there is no real-time pricing (and there won’t be for some time). TubeMogul’s PTV software provides access to inventory that is either fixed-price or bidded in a nightly marketplace. The software then allows for the application for additional audience data to amplify targeting, and advertisers have shown that they’re willing to pay a premium to use that data.
FR: There is still plenty of education required, and the roadshow is certainly a great example. How else is TubeMogul going about educating the TV industry about the benefits of programmatic?
Eadie: Education remains an ongoing challenge – traditionally digital and TV buyers have operated in silos and spoken different languages. Accordingly, in addition to the roadshow, we’ve developed comprehensive white papers for both the US and UK markets that give an in-depth explanation of the programmatic evolution, history of TV buying, and the opportunities and challenges associated with extending the benefits of software to TV.
We’ve also built out our own infographic illustrating the TV ecosystem that depicts the various intermediaries that sit between the advertiser and the viewer, in addition to developing a website with instructional videos and additional resources.