The dream of marrying premium TV inventory with the ease of programmatic buying is materializing slowly.
Agencies and media owners operating under legacy systems, technical inconsistencies and absent measurement standards are inhibiting the ability to modernize the way TV inventory is bought and sold in a time when marketers are trying to find targeted audiences in a fragmenting TV landscape.
The TV business is still a roughly $65bn market, and much of that comes from traditional linear TV. But TV is built around the upfront market; budgets are put in place months in advance, unlike most digital buys that happen in real-time.
Julian Zilberbrand, executive vice-president of audience science at ViacomCBS, said during a panel discussion at the IAB ALM that advanced TV planning accounts for a “small chunk” of the network’s total linear TV business.
“It's not digital,” said Zilberbrand. “It's not simply just going to a programmatic platform and looking to activate. Maybe it'll get there someday, but it's actually quite difficult to execute addressable [today].”
Much of the discussion at this year's IAB Annual Leadership Meeting in Palm Springs, California centered around addressing the industry’s cookie problem, but there was considerable focus on the growing over-the-top (OTT) TV marketplace as consumers continue to flee the cable bundle.
Programmatic TV has been on marketers’ minds since at least the middle of the last decade. In 2015, Comcast bought Visible World for its programmatic linear TV platform, AudienceXpress. In 2018, Altice acquired a similar platform called PlaceMedia, and AT&T did the same last year when it bought Clypd.
But there has been at least one casualty. Cable group Cox announced at the end of January that it will close its five-year-old programmatic TV unit, Videa, on 31 March. That comes just a month after it quietly sold off Gamut, its advanced TV business, to Apollo Global Management for an undisclosed sum.
Cox would not comment beyond the statement it released on Videa’s closing on 31 January.
“Over the years, the company made significant progress in the programmatic television space, but it is no longer sustainable to continue operations. We thank our extraordinary employees for their hard work and will continue to provide resources to help them through this transition,” the company said.
Two executives at TV adtech companies said that programmatic TV only accounts for mid single-digital spend of the total TV market.
By the strictest definition, programmatic advertising combines computer programming tools with automation to target users based on available data: Programs, plus automatic, equals programmatic.
However, the immediateness of a data-rich internet has added real-time bidding and one-to-one targeting to the definition of programmatic.
That definition doesn’t fit in the world of broadcast TV, which isn’t delivered over the internet and at best offers household-level targeting through set-top box data.
As a result, executives on the buy- and sell-side have mixed views on whether emerging TV planning and activation platforms, such as NBCU’s One Platform and Amerpsand’s And Platform, count as programmatic solutions.
As one executive at a smart TV company explained, digital buyers used to one-to-one targeting aren’t wholy impressed by household-level data, while TV buyers used to relying on Nielsen panels are excited by the prospect of reaching specific households.
Part of the riff over defining programmatic TV comes down to delivery. Linear broadcast TV campaigns can be planned through a programmatic platform, but the ads are usually prepared to be dynamically inserted far in advance.
One agency executive said most programmatic TV buying is done in the scatter market, outside the upfront season, and usually planned days, weeks or months ahead.
“Even the stuff that is automated, we’re still booking that out for a month away,” said the agency executive.
“The only way this scales is to deliver on the definition of programmatic,” said one of the TV adtech executives, “which is data and automation.”
Executives at agencies, media owners and adtech companies all say that TV buying and selling teams are still constructed in ways that don’t match TV consumption habits.
The agency executive said their company moved quickly to combine TV buying units, whether linear or OTT, into one video group. However, given the size of YouTube and emerging video platforms such as Quibi and TikTok, the “grey area of what’s digital and TV is really complicated.”
A recent study from Prohaska Consulting found that among 121 agencies surveyed, half of their spending is purchased programmatically, but only a third of agencies have a unified programmatic buying team.
Matt Prohaska, chief executive officer of Prohaska Consulting, said most TV selling teams have yet to truly converge, too.
"The legacy of how TV inventory and yield have been managed has worked relatively well for publishers for 60-plus years...,” said Prohaska. “[W]e understand and appreciate the rhythm of that process, and why a publisher would still like to constrict supply, aggregate demand and do a very fixed season to sell about 70% of [their] annual inventory. That's been a relatively good marketplace for most sellers."
Justin Rosen, vice-president of advanced TV data and research at Ampersand, said at IAB ALM that internal processes to facilitate programmatic TV are still taking shape across the industry.
“It's the guts,” said Rosen. “It's the operations to actually make this happen, even with the scale that we're now providing, that I think is the slowest to move. But once we get there, I think we'll see a lot of dominos fall.”
The measurement problem
Some brands are ready to spend on addressable TV campaigns through a programmatic offering.
Maggie Zhang, executive vice-president of video research and insights at Dentsu Aegis Network, said at IAB ALM that she’s seeing a “material shift” from demographic-based TV buying to audience-based buying for some clients.
“Measurement can unlock a lot of new incremental budget shifts from traditional linear to audience-based buying, [but] clients need to see the results,” said Zhang.
Station groups are beginning to embrace CPM-based buying, OpenAP is working to standardize advanced TV audience segments and Project OAR is opening up more addressable broadcast TV inventory, but TV advertising still largely relies on GRPs and broad demographic-based segments provided by Nielsen.
Planning an addressable campaign through a programmatic platform only to activate on a GRP backed by an 80,000-household panel doesn’t exactly mesh. As the director of programmatic at an entertainment company explained, converting from GRPs to CPMs makes it “hard to predict” where to allocate spend.
As another executive at a TV adtech firm put it: “We’re only in the third inning.”
The Drum's annual digital advertising conference Programmatic Punch will take place on 10 June in New York.