In today’s evolving media environment — wrought with seemingly daily progression in technological advance- ment — marketers often feel as though they’re racing for victory on a track showing no finish line. Customer and
response data aggregation has become a foothold for forward
progress, resulting in a new collaboration paradigm between
agencies and advertisers.
Gone are the days where online and offline marketing
initiatives could coexist in separate silos while individual
marketing teams marched to the beat of their own drum.
Lines have blurred across the customer journey, meaning
the strength of a marketing team’s analytical backbone and
holistic understanding of how individual marketing touchpoints impact both top of the funnel awareness and downstream conversion are more critical than ever.
Strong analytics empower agencies and marketers alike
to equip themselves with vital visibility into cross-channel
response metrics, informing an optimized media mix, mitigating marketing waste, and protecting oh-so-precious profitability margins. They also create a thirst for new and exciting data-driven media opportunities that can help provide
incremental reach and revenue, while delivering impressions
against new and/or hyper-targeted segments of an audience.
One such opportunity that has grown as a conversation
topic in recent years is programmatic TV. And while it’s
been discussed at length, most are still unclear on what it
really means. Unlike digital programmatic, TV inventory is
not purchased through an exchange or DSP with real-time
bidding. Linear TV inventory has its own set of fundamental
rules and characteristics; therefore programmatic TV requires a more broad classification than its digital counterpart.
Loosely defined, it is CPM-automated,
data-driven (first or third party), audience based transacting. In actuality,
how prevalent is linear programmatic
TV buying? That is, programmatic in
its truest sense — where inventory is
bought and sold on impressions, using
While there are those that would
argue the viability of programmatic
TV in its current form, the fact is
there remain inherent challenges on
the linear TV landscape that have
prevented programmatic TV buying
from reaching its promised potential.
In fact, the “programmatic TV” that is
taking place today offers little in terms of scale or efficiency,
as the inventory pool is currently limited and mostly consists
of local media, often at the higher end of the CPM spectrum.
Companies playing in the programmatic TV space are
finding that TV commercial integration lead-times and a
constant demand on supply are unique challenges. Linear TV
inventory is finite. Upwards of 60 to 80 percent of national
TV inventory is sold in the upfronts (depending on daypart/
genre/network) with annual CPM increases fed by market-
place demand. The remaining inventory is sold through the
scatter marketplace, which is in constant sell-out and has
seen historically high pressure in recent years, giving sales
reps more control over pricing and inventory flow.
Scatter inventory is also a necessity for media providers to
manage against CPM guarantees and under-delivery in the
form of ADUs (make-good inventory). If media providers relinquish scatter inventory in lieu of a programmatic platform,
it would likely end up causing more harm than good to the
existing TV ad sales model — one of the reasons the industry
is yet to see a media provider rush up the mountain to pioneer the programmatic landscape since a failed attempt at
what was once promised to be a programmatic breakthrough:
Google TV Ads, which was discontinued in 2012.
Where will programmatic TV go in the coming years?
There are plenty of forward-thinking companies focused on
cracking the nut. However there are many variables that
may impact programmatic TV’s evolution — not the least of
which is media provider industry consolidation. As the industry further consolidates, operational changes may become
increasingly necessary, opening the door for more programmatic sales offerings. And it’s no secret that Google is investing resources into another attempt at getting programmatic
But will the media providers relinquish enough invento-
ry to make programmatic TV a viable platform? Will they
allow themselves to lose ad sales control? We have yet to see
meaningful adoption. One thing we do know: from an audi-
ence targeting perspective, entrants will need to tread care-
fully. The Federal Trade Commission’s (FTC) recent ruling
against Vizio for violating the FTC Act protecting against
consumers’ TV viewing information from being collected
and sold to third parties and advertising entities was a mas-
sive blow to the connected TV audience targeting model.
Only time will tell whether or not the programmatic TV
model can meet or surpass the effectiveness of tried-and-true,
performance-based, direct response TV buying, which re-
mains the clearest path to victory in TV marketing. ;
By Jeff Lazkani