Is Programmatic TV The Future of TV Media Buying?

Programmatic buying has been a topic of conversation in the media industry for the last several years, initially in relation to digital. The standard definition has incorporated two key elements: data-driven insights to buy a person, not a site; and an automated, real time bidding model. Today, if you ask 10 different people the definition of programmatic buying, you will likely receive 10 different answers. The one component that ties all definitions together is that programmatic buying involves, at minimum, the use of data to reach a target audience.

On March 24th, we traveled to NYC to attend the Cynopsis Programmatic TV Summit. Here we, along with thought leaders from the media industry, dove into where this buying model currently sits in the television space, how it is evolving, and who the key players are.

The summit kicked off discussing how fragmented the landscape currently is. As an example, The Walking Dead can be viewed on nearly 14 different platforms, from linear TV to OTT platforms (Hulu, Netflix, etc.). The traditional buying model where an advertiser buys a particular show based on a Nielsen rating point, only accounts for one (or maybe two) of those platforms. The challenge for marketers now is how to reach audiences while they consume content across a variety of platforms without fragmenting advertising dollars. The solution is targeting the person, not the program or platform.

With the rise of programmatic buying, defining audiences becomes increasingly more important. Media planners are starting to shift from media selectors to audience definers, and the key will be to use data-driven insights to define, optimize and analyze throughout the planning and buying process. Using just any available data isn’t enough; in order for advertisers and media agencies to make the shift to programmatic TV buying, that data has to be reliable and current, therefore actionable.

With a shift to a data-driven buying model comes added pressure on analytics in television. The existing media currency, the gross rating point (GRP), is now being challenged by an industry that wants to segment beyond age/gender on the linear screen. Nielsen, the scorecard for industry ratings, will need to evolve or risk being thwarted by others, such as the recently merged ComScore and Rentrak.

All speakers and panelists were in agreement that applying audience data to the television space is and will continue to be a game changer. The question left is whether the layering of data will continue to complement the current model or replace it completely. While eMarketer predicts that programmatic TV ad spending will reach $11.5B or 13% of the US TV ad market by 2019, a consistent definition of what this buying model means in this space is a worthwhile next step. As this space continues to evolve, the media team at LMO will evolve as well and look to apply these strategies and learnings to our clients’ media plans where appropriate. 

Ileza & Sarah

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