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01 April 2016

Programmatic TV – learnings from the US


TV advertising is unquestionably an integral part of contemporary culture. While the British nation's appetite for quality TV ad content still exists, the way advertisers approach the consumer has had to change. Brands can’t rely on blasting out the Milk Tray ad content alongside Coronation Street in the hope that it’ll be watched by the right audience any more. The proliferation of screen devices and the rise of the always on consumer has meant that the medium needs to adapt to target consumers better, making programmatic a priority.

Programmatic TV works for everyone. Its instant and data-driven nature means broadcasters can monetise all TV inventory effectively, advertisers can improve targeting, and consumers won’t be served irrelevant content.

As it stands, programmatic TV advertising is still nascent in the UK, but the situation is different when we look further afield. The US is paving the way and there’s a lot we can learn from what’s happening across the pond.

Across the Atlantic – US vs UK 

Programmatic TV advertising in the UK is largely confined to video-on-demand (VoD) services. However, the US is seeing players like DISH launch programmatic media-buying platforms that enable advertisers to buy individual impressions via bidding during live and DVR-playback TV on an impression-by-impression basis, targeted down to the household level.

This means digital advertisers can tap into the linear TV market, which we know consumers believe in. According to a consumer study from TV advertising trade body Thinkbox, almost 40 per cent of consumers trust advertising content they see via their TV screens. UK advertisers need to ensure this is reflected in  their advertising budgets. Spend on digital is vital, but it needs to be distributed across all screens consumers engage with, not just mobile ones.

Playing the programmatic game

In the UK Sky was first to enable advertisers to break free from the broadcast-based spray and pray model, where generic targeting is employed to broadcast ads to millions of homes nationwide. Sky showcases different TV ads based on data points from age to income. However, there are barriers to overcome before the UK reaps the full benefits of programmatic TV.

The UK is highly regulated and that can lead to reluctance from broadcasters to innovate, given they are responsible for every ad that goes to air. Ensuring the validity of data and understanding audiences is fundamental to these broadcasters. Any kind of risk - from the commoditisation

of their inventory to a lack of rich third party data or standardisation in the industry - is going to make broadcasters hesitant to make the leap.

However, the benefits of programmatic TV, notably greater ease and efficiency for marketers to buy inventory,is in demand.  Perhaps a slower, manual process now, the US is already making great strides to alleviate these issues that might give reasons for pause.

Broadcasters would do well to follow by DISH’s example. DISH now has the ability to deliver adverts that match specific criteria set by the marketer. Going beyond just age and gender, they can target those people looking to book a holiday, buy a car or switch energy provider, for example. Giving the consumer what they want, the broadcaster has given itself the opportunity to grow by attracting digital advertisers looking to penetrate the linear TV market, their past advertisers as well as new brands.

The digital first advertisers and brands making a play in the programmatic TV market expect and are used to accountable metrics. Broadcasters need to ensure they’re giving clients the best opportunity to purchase efficiently, which is exactly what programmatic TV can do. By leveraging data, brands can continuously optimise the TV channel in ways never before possible. UK broadcasters and advertisers need to work together and apply digital advertising’s efficiency models to television.

Advertising of the future

Programmatically served content is no longer a question of if – but when. Brands need to get on board to thrive as the industry moves forward, and TV needs to continue to be a focus. Creative content is what consumers engage with, but programmatic is needed in order to reach the level of targeting required to deliver efficient return on investment.

For programmatic TV to thrive in the UK, we need to adjust our mind set. On the whole, TV advertising in the UK has been handled in the same way since its inception 60 years ago. This change needs to be a conscious decision from the entire television advertising ecosystem, propelled by having a common currency on how broadcasters are using data. Once this is achieved, the industry will enjoy greater efficiency and more opportunities to grow.

By Dwight Ringdahl, Senior Vice President, Technology, RhythmOne


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