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The Three Essentials for a Killer Programmatic TV Solution

November 09, 2015

The Three Essentials for a Killer Programmatic TV Solution

by Cordie DePascale for Broadcasting & Cable

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We all know the advertising ecosystem is constantly changing as new trends come into play.  And with each trend, new technology is developed to help agencies, broadcasters, and publishers adapt and excel.  The hottest trend right now is programmatic TV – and you’ll accordingly find plenty of resources available that provide the “do’s and don’ts” on addressing it. However, programmatic TV is still in its infancy, so there are a lot of different ideas floating out there about the “essential” elements needed for a proper solution.  Most of those solutions – available or in the pipeline – will not sufficiently address the industry’s growing needs. 

There are really three elements to successfully adopt programmatic TV: targeting and engagement, measurement, and demand. If you’re looking for a vendor, or about to execute campaign, these three essentials must be considered.

Targeting and Engagement

Any solution must guarantee accurate targeting.  This is a must.  Generally speaking, TV ad inventory is sold on the basis that content (or daypart) is the path to the audience. The solution should identify programs and dayparts that carry the target audience using syndicated research data and historical buy information in order to reach that specific audience in an upcoming campaign. That is TV buying 101. However, in order to be successful, the solution needs to be able to pinpoint audiences and eliminate “out-of-demo” waste, too. Allowing for that flexibility is critical.

Targeting is critical, but how do we know the target audience actually saw the advertisement?  The solution must be able to identify the type of audience per daypart and their concentration, and map that data against advertisers’ goals to find the best inventory match.  For instance, overnights are not typically a good fit for advertisers focusing on building awareness, but it may be a good fit for an advertiser using direct response ads with a clear call to action.  Combined with other data elements, we can also project and anticipate audience response during the daypart. When you’re able to trust your projections, the payoff is huge.

As digital programmatic buying proves, when the solution is accurate and reliable, you’ll get more ROI with less time and effort.  And while broadcasters fear this will commoditize and therefore devalue their inventory, it actually should yield a higher cost of inventory as this new form of targeting offers better proven ROI.

Measurement

Delivering ads in a more effective way is great, but it doesn’t mean anything if you can’t prove the effect of your efforts. Measurement must be performed consistently throughout the campaign process – from projections and targeting to campaign completion.

The data needed to power the solution, validate targeting, and measure engagement at this stage includes:

  • Overnight spot verification (post logs won’t suffice unless they’re provided nightly)
  • Overnight audience ‘engagement’ with the content (third-party data)
  • Response and sales attribution data (from the call to action in the advertisement)
  • Lastly, the advertiser’s Return on Investment, calculated using the above data.

This compiled information will be stored as statistics for future planning of correlated campaigns. This becomes our in-house proprietary data, that we can leverage going forward. 

Value

While sellers clearly see the need for programmatic TV, who is looking for this on the demand-side?  What is their expectation around its execution?  Advertisers are eager to reap the benefits, but agencies are left to figure out exactly how to adopt and what’s required to do so.

One article details the “sticker-shock” of programmatic implementations: “Inside the Hidden Costs of Programmatic" via Advertising Age. The article speaks to the costs associated with data subscriptions, technology and development investment, and the people that operate the programmatic solution.  (While programmatic TV offers more automation to more targeted transactions, it does not necessarily mean companies can reduce staff.) These costs are often not immediately clear, but the bottom line is.  Trusting that the benefits of programmatic will far outweigh the investment isn’t to be taken lightly. 

Reaching True Programmatic TV

So where will “true” programmatic TV have its beginnings? In TV, there is an array of established inventory types and few of them have the targeting and measurement capabilities that programmatic TV requires. Making the case for direct response illustrates how “traditional TV” can take broader steps toward programmatic TV. After all, direct response already uses all of the techniques described above to analyze and optimize campaigns today.

We will continue to see advancements in broadcast automation and convergence from the buy and sell sides -- that is a given for broadcast to continue dominance in the market.  But there is much more to the story.

When envisioning our programmatic future, addressable TV is likely the vehicle getting us there. Providing different commercials to viewers watching the same commercial break based on their household data profiles is the next step in audience targeting.  Addressable TV’s technology for dynamic ad insertion, self-measurement, third-party measurement, and hyper-local capabilities (neighborhood-level, not DMA) enables marketers to truly pinpoint their audience.  

In addition, addressable ads could be enabled to further track engagement.  Incorporating a call to action and utilizing a device like your remote control or Xbox Kinect to identify the individuals within a household and how they interact with the ad would offer advertisers a golden opportunity.  For instance, consumers could tell their device to “flag” an interesting advertisement for later – so they can keep watching their show and come back to the product afterwards.  Advertisers could then nudge consumers to consider that product, and show related ads down the road to help drive conversion.  This interaction, tracked throughout the process, offers a significant way to deliver real ROI measurement. If this type of engagement became a standard, this could be offered to scale, and across all devices – set-top box, OTT, and more.  It’s one more way of extending addressable TV’s value to all parties involved.

However, the availability of addressable inventory options currently extends to only a small subset of the total universe of local cable and satellite inventory. This limitation in scale sets a steep growth trajectory for our programmatic story. Building strong programmatic systems and workflows to manage buyer and seller interactions will take shape only when these options improve.

Programmatic TV trailblazers understand that local TV with its vast pool of inventory, depth of analysis capabilities, optimization techniques, and audience scale is a great proving ground. One TV spot today will become multiple spots divided and sent to different, more meaningful audience segments tomorrow.