We, as consumers, are increasingly viewing video content through multiple digital platforms. As viewers turn their attention away from linear TV, connected TVs (a term also encompassing plug in streaming devices like AppleTV / Roku), are becoming the norm. As a result, ad dollars are moving to digital platforms. The global TV advertising market is estimated to be worth around $200 billion, representing around 40% of all advertising spend. By some estimates, programmatic TV spend is set to reach $22 billion globally by 2019, and while that’s still a small portion of the pie, it’s growing fast.

But what exactly does programmatic TV entail? For many years now, brands have had access to technologies enabling them to target specific groups of consumers through digital ads, based on attributes (such as demographics, location) and online behaviour (searching for ‘holidays to Paris’ etc…). Now, this is becoming available on connected TV (CTV) platforms, linking CTV data with a rich data set including cookies, mobile device IDs, matching brands to desired audiences in a far more efficient manner. Measurement providers like TVision, mParticle and Tru Optik are providing advertisers with metrics including audience size and demographics as well as usage stats. Facebook has also confirmed that it’s testing ad delivery through CTVs in addition to other platforms.

Programmatic TV promises benefits for both advertisers and broadcasters, and at its crux is the efficiency achieved through targeting, synergy, and automation. Automation saves lengthy negotiations with sales reps: instead slots are allocated using technology, based on demand and supply. By integrating TV into programmatic platforms, media buyers can manage campaigns from a single place, allowing for optimisation across all digital devices, and providing real-time performance updates on ROI to better refine strategy. Additionally, in the same way that the rise of digital opened the field to a wider base of advertisers, programmatic TV may give smaller brands the chance to put their product before potential customers, as well as less well-known content creators to sell advertising space in a less risky and cost-effective manner.  Such competition is a good thing for the industry as well as the economy as a whole.

However, it’s not been completely smooth as programmatic enters the TV world. Some TV executives, especially those from larger networks, are concerned that programmatic will commoditise their valuable inventory. As a result, it’s likely we’ll see lower-tier cable networks with excess inventory adopt programmatic faster. There are technical challenges too. Take standardisation; whereas in mobile, media buyers have to deal with Android and Apple platforms, in connected TV, ads have to be optimised across Amazon, Apple, Roku, Playstation, Xbox, as well as TV manufacturers – and different hardware platforms too. Plus, the data is fragmented across different providers and owned by different players; media buyer may need different processes and datasets to run programmatic campaigns on different cable channels. Without centralisation of data, easy access to platforms, and standardisation of metrics and benchmarks, it’s harder to make a compelling programmatic product offering. As Ryan Beyer, director of innovation for TV and video for Lotame puts it “Just because OTT and connected TV inventory is delivered through the internet to a big screen or a mobile phone doesn’t necessarily mean it can be purchased the same way you programmatically purchase video through a DSP [demand-side platform]. And it doesn’t mean that your targeting options are direct, one-to-one targeting options that a digital marketer might use.”

Despite the challenges, benefits of programmatic TV – combining the impact of a highly visual advert to an engaged audience, with a targeted, cross device strategy – will be too great a lure for brands. But it’s technology platforms who have the most to gain if they can bring the success of programmatic to connected TVs. Only time will tell how everything plays out, but it’ll be an interesting ride for sure.

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