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Programmatic Advertising Set to Drive TV Buys, But What’s Under the Hood?

May 6th, 2015   ||    by Doug Bonderud

Annual programmatic buys for television advertisements in the U.S. is set to reach or exceed $8 billion in 2019, Marketing Magazine reports. Programmatic advertising purchases in the video and digital ad space will account for one-third to one-half of all transactions, which is a significant shift in this historically inelastic market. Driven by new technologies for both inventory and distribution, change is on the horizon, but what’s under the hood?

Unified Front

For programmatic buying to really make inroads among traditional networks and ad buyers, it must provide simple, revenue-driven access to the linear TV market. The first step in the process is to focus on unifying the buying and selling process. Advertisers won’t leverage programmatic tools if they aren’t simple to use and don’t provide access to high-quality time slots, and buyers are increasingly concerned with extending their reach across the digital divide. The solution? Unified technology.

The Best of Both Worlds

Beyond unification, tools are also being developed to merge the need for addressable content with programmatic buys. eMarketer recently noted that 8 percent of TV ad executives are currently purchasing time slots programmatically, and 12 percent intend to increase spending in this area in the coming months. In part, that shift can be attributed to the rise of programmatic buying platforms, which combine data-driven audience metrics with programmable purchasing to help buyers get the best of both worlds. Simplicity and automation allow advertising agencies more time to focus on creating addressable content.

The Future … Today?

In 2007, Google tried to take on the world of programmatic advertising. In 2012, the company waved the white flag, saying that “video is increasingly going digital and users are now watching across numerous devices.” In other words, TV was on the way out, digital was on the way in, and shifting gears was the only safe bet. The move was incorrect, however; companies are now turning to a mix of digital and linear TV advertising to reach the largest number of potential consumers. In fact, the technology has reached the big time: This year, Oreo and Ritz were the first brands to purchase programmatic advertising space during the Super Bowl.

Simply put, the market is ready for a shift, and new ad technologies are springing up to drive the future of programmatic buying. It starts with unification—merging digital and linear ads along with buyer and seller infrastructure—followed by implementation of addressable technologies that work with programmatic tools to give advertisers the best possible return on investment.

Looking to make smarter TV ad buys? Your journey starts here.

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