Advanced TV – which includes Smart and Connected TV hardware and interactive and over-the-top (OTT) services – is helping to bring the reality of programmatic ever closer to all screens. I believe it will arrive much sooner than most people realize. Let me explain.
Up to this point, programmatic TV has not lived up to its original hype. While programmatic digital display advertising is projected to account for more than 80 percent of US display spending in 2018, programmatic TV has largely failed to launch. Linear broadcast TV doesn’t carry tags and cookies that track viewers with the same granularity that the internet provides. Nor are most systems set up to make split-second decisions about which ads to serve. These are often decades-old systems that were built in the hard-wired days, well before there was even an inkling of programmatic.
But technology has not been the only barrier to programmatic TV. Traditional players in TV advertising have, for the most part, resisted changes to a model of buying and selling that has remained consistent for decades. Why? Primarily, it’s because networks don’t necessarily have the incentive to embrace true programmatic selling. There’s a limited amount of ad space in every hour, and that space almost always sells out.
However, the emergence of Advanced TV has made programmatic buying a reality. In some cases, such as linear TV being delivered through the internet (e.g., YouTube TV, DirecTV Now, etc.), the technology usually allows for addressable advertising and programmatic buying. Programmatic buying is also generally available through Advanced TV hardware itself – for example, through First Impression Units, ads can run on the home screen of Smart TVs. In many cases, the First Impression Unit is both the first ad viewed when a consumer turns on the TV and last ad viewed before entering an ad-free environment such as Netflix. And within the next year or two, we will likely see more options for programmatic insertions into linear TV through Advanced TV receivers.
Advanced TV’s growth is the inflection point for bringing programmatic to TV advertising. Although it may be a few years before the bulk of linear TV ad time can be purchased programmatically, the opportunities to buy programmatically are growing. Agencies and advertising teams should optimize their processes now to capitalize on this opportunity, because the pace of growth is accelerating – especially as Advanced TV hardware becomes the norm. eMarketer’s latest forecasts* project that $4.7 billion will be spent on programmatic TV by 2020 – a jump to 6.8 percent of all TV ad spending, vs. a projected 2.5 percent in 2018.
“TV” and “digital” people should come out of their silos to collaborate and better understand how programmatic buying can connect all the pieces of a cross-screen advertising plan and produce higher performing campaigns. We will all likely be better off when all ad inventory is available to be purchased in real time and truly measurable.
Reach out to learn how to take advantage of all that Advanced TV has to offer and help ensure that you don’t fall behind the programmatic TV curve.
*Source: eMarketer, July 2018
This article contains forward-looking statements. In some cases, you can identify forward-looking statements by the words “may,” “likely,” “will,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. All statements other than statements of historical fact are statements that could be forward-looking statements, including, but not limited to, statements about the potential and effectiveness of advanced TV advertising. These forward-looking statements are subject to risks and uncertainties, assumptions and other factors that could cause actual results and the timing of events to differ materially from future results that are expressed or implied in the forward-looking statements. Factors that could cause or contribute to such differences include the dynamic and rapidly evolving sector, as well as the highly competitive industry that RhythmOne operates in, which make it difficult to evaluate prospects. These and other risk factors are discussed in RhythmOne’s Annual Report for the period ended March 31, 2018. The forward-looking statements in this article are based on information available to RhythmOne as of the date hereof, and we assume no obligation to update any forward-looking statements.