Why TV advertising will never be the same

Until very recently, traditional television had not experienced many wholesale changes. Yes, there was the advent of colour and digital signals, but the way advertising found its way onto TV has not changed for many decades.

In an increasingly multi-screen world where TV ratings are slowly, but surely decreasing, marketers are beginning to understand the need for ways to recapture the value of their investment into video. This has led to the boom of online video, which along with increased consumption has also seen greater ad spend being directed towards it.

Of course, this poses a very pointed issue: TV and digital video are very different, are transacted differently by different groups of people using very different selection criteria. In other words, video advertising now operates an increasingly cumbersome workflow that includes managing many systems in order to move advertising investments into the right channels.

But that was all very 2013.

This year, we are seeing a distinct focus in Australia on bringing back the efficiency of TV buying from decades ago and tying it together with the precise targeting abilities found in digital advertising. It’s called programmatic TV.

While programmatic has traditionally meant an auction-based environment for buying and selling digital advertising, the concept has since expanded greatly into various models of automation. This includes putting machines to work on applying greater efficiencies to planning and optimization of advertising, not necessarily just the actual buying and selling of media.

Programmatic TV is the application of those automation principles to television buying, bringing greater targeting abilities of audiences to a medium that has been traditionally bought and sold based on imprecise age and gender metrics. For advertisers, the difference is the ability to target ad spend towards specific business audiences: reaching females aged 18-35 vs. reaching females ages 18-35 that like a particular brand of cars, for example.

This is all made possible by the activation of data, which is also the lifeblood of digital advertising.

And, of course, applying programmatic principles to TV is yet another step towards using similar data pools to be able to engage with individual viewers, across the multitude of screens on which they watch video. Just imagine: a single ad buy that can effectively reach the right audiences with an appropriate marketing message, regardless of the screen on which they’re viewing.

For marketers, this is the holy grail of marketing, which was lost long ago when the concept of TV shattered into millions of smaller connected screens. The convergence of programmatic across all screens, including TV, is why spending is projected to skyrocket, according to IPG’s MAGNA GLOBAL. US markets will see just over a total of $55 billion in programmatic spending in the next four years, and Australia will see impressive gains to top $4.6 billion in aggregate spending by 2017.

US marketers are already beginning to understand the power of programmatic across digital and TV; Nielsen data is now being supplemented with behavioural data collected from the set-top boxes of cable providers and third-party consumer purchase data. Combining these sets of data in a programmatic environment means advertising spots can be identified more effectively and bid for in the same way as digital inventory.

Which is not to say that the traditional and well-established buying processes of TV is going away anytime soon. It’s not.

But, programmatic better ties together their efforts in TV and digital, allowing for a better understanding of how their dollars are being spent to find the right audience, on the right screen, at the right time.

For marketers, it’s the start of a whole new world.

Dan Ackerman, Senior Vice President of Programmatic TV, Adap.tv

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