B&T goes one-on-one with The Trade Desk’s general manager for Australia and New Zealand, Mitch Waters, to talk turkey about programmatic TV, and whether the end is nigh for traditional TV upfronts.
How do you rate the programmatic TV advertising landscape in Australia compared to our overseas counterparts?
It might be helpful to look at the TV landscape as a whole to answer that question. The most relevant comparison would be with the United States because it highlights the unique characteristics of the Australian market. One of the big differences is the prevalence and market dominance of subscription-based providers or what we might know as cable TV in the US. Currently there are 10 cable TV providers in the US, while in Australia we have one – Foxtel. Here, the big force is still free-to-air.
The key structural differences flow down to how media is bought and sold. In the US, something like 80 per cent of TV ad inventory is sold wholesale during upfronts. Australia has upfronts, but it’s more of a preview-type event – not many advertisers will lock in their commitment at this early stage.
The biggest content story of the last 10 years whether you are in the US or Australia has been the rise of internet TV, Connected TV, OTT (over-the-top) TV or whatever you want to call it – basically Amazon, Netflix, Stan and these types of players. The growth of these services has been nothing short of phenomenal – in the US, three out of four people own a connected TV. What’s interesting for programmatic is that we regard these types of TV services as ‘addressable’ – that is, we can figure out which user is attached to which devices and serve them relevant ads accordingly.
At The Trade Desk, we are currently running connected TV campaigns for a few forward-thinking Aussie advertisers. Despite the US having a much more mature programmatic landscape, as well as a far more variety of TV options, we are not that far behind in the programmatic connected TV sense. We are having the same conversations with agencies/clients in Australia and we face similar education requirements. This further reinforces our experimental nature in Australia.
What are the challenges that advertisers are up against when using programmatic TV? How can they be overcome?
I think audience measurement is the biggest issue that needs to be addressed. There’s no universal standard for measuring connected TV, which of course makes it tricky for traditional TV buyers to fully understand it’s effective targeting and reach. Tools like Nielsen Digital Ad Ratings’ on-target percentage is widely used for online video, however, CTV devices are not accurately captured, so there is a clear need for the metrics to catch up.
Connected TV advertising also got a bit of a bad reputation for not controlling frequency – that’s a nice way of saying advertisers were spamming the same person with the same ad over and over. This was happening because the ability to link up the same user across devices was still in its infancy. We now have much better methods of having visibility on the entire customer journey across devices.
One other challenge we’re seeing is that many media agencies have yet to figure out where exactly their connected TV buy is going to sit. Is it with the digital team, using digital budgets, or the television team? Or somewhere else altogether? The fact that it’s not a settled matter means the buying is shuffled around various people, so no one is getting the expertise they need to buy connected TV really effectively.
What can advertisers expect from The Trade Desk’s newly-launched programmatic TV offering in Australia. How will it be different from other existing offerings?
The Trade Desk platform stands out because our technology allows at-scale identification of users through IP targeting and storing CTV IDS and matching them to TDIDs, with a degree of accuracy that no other platforms (to my knowledge) can replicate. This means those problems of frequency are eliminated, we can apply first or third-party data targeting and the ability to measure across channels really effectively, which allows you to be with the customer on their entire journey.
It’s not specific to connected TV, but all buying on The Trade Desk utilises our unique architecture which uses a system called Bid Factors, as opposed to line items. This results in more dynamic and flexible bidding optimisation, especially when you want to do targeting related to factors like weather and geolocation.
How do you see programmatic TV evolving over the next five years?
As long as audiences continue to cut cords and consumer TV content across their devices, I don’t see how you can efficiently advertise to these audiences without programmatic tools. So, I believe the future is looking incredibly bright. The quality of the content just keeps getting better and better, and the marketplace keeps getting more competitive. Additionally, our technical ability to map devices and deliver on that customer journey I mentioned earlier is improving all the time.
Even though these are all good indications, I’m always wary about how we perceive the world through our ad industry bubble where we assume everyone is under 35 and just watches Netflix. The fact is – and it’s borne out by independent research – that free-to-air TV remains the dominant force in Australia in terms of viewership, and that’s not going to change in a hurry. We need to get better at seeing how we as a programmatic platform can work in innovative ways with free-to-air providers and our clients.
Will programmatic advertising replace the need for the traditional TV upfronts?
I don’t think so. The upfronts are a crucial part of demonstrating the upcoming slate of content which is going to get viewers excited about their channels/apps/platforms. We have already seen local upfronts shift to start talking about audiences more and how to target through programmatic tools.