Programmatic and Addressable TV: What You Need to Know about the New Television Advertising
The way we plan, buy and track television advertising has undergone rapid change in the last 24-36 months and the biggest game changer is programmatic TV buying. Programmatic provides the buying/selling automation, tracking and reporting of a digital campaign and translates that to television. By 2018, programmatic will shoot from 1% to 6% of the overall share of TV ad spending, totaling $4.43 billion dollars (eMarketer).
But the question is, how will all these changes affect your media planning and buying strategies and the overall marketing of your business? CTV Media is here to help de-mystify the world of programmatic TV advertising and set you on path for success. Read below for definitions, opportunities and challenges with programmatic and some of our favorite resources to help you navigate this new technology!
The New Definition of Television
With the rise of TV viewership on connected devices, we need to adjust our traditional definition of television. We like Digilant’s definition best: TV is defined as any professionally produced premium video that’s deployed on any screen from home, to online, to mobile.
What is Programmatic Television?
Programmatic TV is inventory bought and sold on an impression basis using automation.
Instead of utilizing ratings and GRPs (Gross-Rating Point) against a specific demographic to measure delivery or geo-targeting (buying a cable zone instead of the full DMA), set-top-box (STB) data is used to identify a specific audience. You then purchase TV spots targeting this audience programmatically. As long as the target audience is watching, they don’t care if that ad shows up in the Super Bowl or Supergirl.
Different Types of Programmatic TV Inventory
Linear TV Inventory
• Traditional broadcast (ABC, NBC, CBS, etc.) inventory delivered through cable or network connections.
Addressable TV Inventory
• Advertising delivered by set-top-boxes in on an individual household basis using different data points (Experian, Mosaic, 1st party data) for advanced targeting.
OTT (over-the-top) or Connected Inventory
• Advertising delivered through internet-connected Smart TV’s or over-the-top devices like Roku or Apple TV.
What is Addressable TV?
Addressable TV is part of the programmatic landscape, but here’s the big difference. Addressable TV further defines and segments audiences and specific video ads are delivered on a household level in real time. So for example, you may see an ad for a Silverado truck at your house, but your next-door neighbor may see an ad for a Town & Country mini-van. You’re both seeing ads from Chevy, but based on the audience segmentation, you’ll see different ads for different products.
• TV ads delivered through set-top boxes in individually selected households
Opportunities of Programmatic TV
Better audience targeting
• By using STB data, more accurate audiences are identified, appropriate shows and networks are bought, cutting down on people outside of the target seeing the ad.
Enhance audience engagement
• More relevant ads are served to target audiences, increasing engagement and recall. (Google)
Less ad fatigue
• With addressable TV, you can track how many impressions are delivered to a unique household and have a frequency cap so the viewer doesn’t get burned out on the creative.
Efficient buying process
• Many programmatic reports include delivery, frequency and viewing completion rates.
Drive higher value from under-utilized inventory
• MVPD’s and broadcasters will be able to generate more revenue through previously under-used inventory.
Challenges of Programmatic and Addressable TV
• MVPD’s and broadcasters control inventory and premium positions and programs are slowly growing for programmatic buying.
• Advertisers want addressable TV to deliver both at the scale and with the same reliability of traditional television. MVPD’s are slowly making their inventory more available for addressable. 2018 should see larger growth in this area as Comcast and Spectrum Reach continue to evolve this product.
Convergence and Measurement
• More and more people are viewing premium content through the internet, on mobile devices, computers and through OTT (over-the-top) channels and aggregators (Netflix, Hulu, Roku, Playstation VUE, etc.). Calculating total viewership across numerous streams and devices is still difficult and will only continue to get more complex as new viewing technologies emerge. (Altitude Digital)
Creative Development and Execution
• Better segmented audiences means the need for not only more relevant creative, but MORE creative. Creative agencies must start taking programmatic, addressable and other advanced TV options when developing their messages.
Lack of Negotiation
• With an automated process, there is limited room for rate negotiation.
Resources on Programmatic and Addressable TV
Here are some resources we like. Because too much information is never too much!