Programmatic Shaping the Future of TV Ad Buying

Programmatic Shaping the Future of TV Ad Buying

5 minute read
Marshall Sponder avatar

Programmatic ad buying is efficient, effective and delivers real time behavioral insight. It refers to the use of software to purchase digital advertising, rather than traditional process that include RFPs, human negotiations and manual insertion orders.

In simple terms, it's using machines to buy ads.Now some online ad buyers who are using "programmatic" trading techniques for video are exploring options for using the same digital processes for ads on TV, as I learned at a recent Simulmedia Salon on the future of video advertising.

Times are Changing

Last year, a new “audience-buying” platform called AudienceXpress quietly rolled out an automated system that enables agencies and their trading desks to serve ads into the most premium network television inventory. And just this month, AOL’s announced it was moving forward with its programmatic TV buying product, and it already has a major media agency on board.

"We're in a period of change, and that, I guess, is a little overly simplistic to say," said Simulmedia CEO and founder Dave Morgan. Too many people underestimate TV and TV ads, which are still "robust and growing," he said.

Morgan is one of the drivers behind programmatic ad buying. Last week, he transformed the Simulmedia Salon on the future of video advertising into a lively discussion on programmatic TV and various online advertising currencies — including variations between ComScore and Nielsen measurements of advertising effectiveness. The session featured Andrew Feigenson, SVP, Digital Client Service at Nielsen, and Lauren Wiener, president, Global Sales and Marketing at Tremor Video.

This was my first Simulmedia Salon, but it won't be my last.I was impressed with the openness and energy of the place, and eager to hear about Simulmedia's innovative strategies, including matching set box TV audiences with audiences in social media and other channels.

This is the Place

Programmatic clearly is the place to be, even though it's still in its infancy and few can explain it well — even those companies within the programmatic ecosystem. A friend of mine, John Matthews, managing principal and founder of Comscient Group, seems to have the best overall programmatic model of anyone I have met in the space.

At the Gilbane Conference in Boston last December, Matthews explained how programmatic buying is the future. He said there is an ever evolving collection of ad exchanges, data exchanges, real time bidding (RTB), demand side platforms, and supply side platforms that are using new technology and incorporating more and larger data sets. And he noted: "There is more automation, more sophistication, and faster results."

The Importance of Trust

Interestingly enough, the discussion at the Salon centered on trust.TV advertising budgets are controlled by a very small circle of buyers, many who have known each other for 15 years or more, so trust is a strong part of the buying equation.

Learning Opportunities

But over the next few years, the human element — and things like trust — will likely fade as programmatic media buying becomes more and more common, with its cost savings and hyper-targeting capabilities.

Programmatic, and automated buying, selling and delivery of targeting ads (regardless of the medium) is efficient. But which data set do you use to judge the effectiveness of your campaigns? ComScore, Nielsen or any one of a number of specialized vendors have come up with their own metrics and ways of measuring (some which may be more effective in certain situations, depending on what a business wants to do and what its goals are).

The more specialized the currency, the less transparent it appears to be, so media buyers can’t always have insight into how the data was derived.It is also true that TV doesn’t have an online attribution model. It favors media mix modeling that often can’t be entirely quantified for return on investment, a problem Simulmedia is attempting to solve.According to the company website:

Simulmedia has a massive amount of data — set-top-box data on 50 million TV viewers fused with Nielsen, MRI, TRA, and Kantar — along with access to TV ad inventory reaching 115 million homes. The data helps us accurately predict television behavior across all US viewers. We then package and sell targeted TV campaigns so advertisers can reach the right audiences at the right times on the right programs. Finally, we carefully track, measure, and analyze campaign results."

The Future of Programmatic

Programmatic buying and selling is optimized for specific customers. From an agency perspective, it is governed by the size of the agency and its clients. Commonly, TV advertisers want demographic profiling of audiences in other mediums who are watching their programming and advertising, the panelists at the salon suggested.

Right now, few people seem to have deep understanding of programmatic ads. Businesses in this space can’t find enough qualified people and are forming apprenticeships to train the next generation of media buyers and content creators. With that in mind, Matthews and I are setting up a grand “Programmatic Tour” with my students at Baruch College to explore the New York City universe of programmatic platforms.

We just started the tour last week with a visit to Rubicon Project, an online ad tech firm. We'll have more stops on our tour shortly — and we will report about them here at CMSWire.My students are very excited about programmatic and, frankly, so am I.

About the author

Marshall Sponder

For more than a decade, Marshall Sponder has influenced the development of the digital analytics field with his industry blog, WebMetricsGuru, which focuses on social media metrics and web intelligence. He is the author ofSocial Media Analytics and possesses considerable in-house corporate experience as a visionary at IBM and Monster, combined with contract work for Porter Novelli PR, small businesses and start-ups.