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What exactly is programmatic TV?

Define Programmatic: Digital vs. TV

December 3rd, 2015   ||    by Monta Monaco Hernon

Programmatic advertising is publicized as a way to unify media strategies across platforms. However, when people think of programmatic, what often comes to mind is the technology used for digital outlets. To define programmatic in the television realm, you need to take into account the nature of advertising on the big screen in people’s homes versus on the Internet or via streaming video. The programmatic name may be the same, but the game has different—although sometimes subtle—rules and actualities.

Misconceptions

With digital programming, there is an almost unlimited supply of advertising slots available, whether they are display, mobile, or video opportunities. Buying and selling is often done dynamically via real-time bidding (RTB) platforms. As an impression begins to load, marketers receive data about the person who is accessing the content. Those interested bid for the space, and the highest offer wins.

To define programmatic, StudyBreak Media describes it as meaning not only automated, but also of or according to a program, schedule, or method. Therefore, programmatic buying is “buying with a methodology.” In other words, when applied to advertising, programmatic collects data and uses algorithms to target impressions or audiences. It follows, then, that programmatic is the way for advertisers to determine which spots to purchase. RTB is a subset, or a way of enabling the transaction.

While RTB is associated with the online world, questions arise when it comes to its use in television. Videa President Shereta Williams explained in Adotas that programmatic TV advertising is conducted through private marketplaces. The quality inventory is scarce, and the sellers want to secure future commitments. Sales are done on a forward-reserve basis. The workflow from ordering to performance reporting is automated, but there is human input in addition to data analytics.

According to INMA, RTB is akin to reserving a room through a service such as Priceline instead of directly through a hotel. The price is good, but there is less control over variables. With RTB, the non-guaranteed auctions don’t necessarily account for non-quantifiable attributes, including video quality or type. For example, the same type of audience might watch a sporting event and a news reporter talking about an event, but the viewer is more likely engaged with the former. The price for an advertisement should reflect this, INMA states. With programmatic TV, both audience and inventory quality are taken into account.

Fraudulent Ways

In addition to mistakenly associating programmatic TV with RTB, people also sometimes fear fraud, which is prevalent in digital advertising. Shell websites are flooded with miscellaneous traffic to trick advertisers into believing real inventory is available. In reality, the ads are viewed only by bots. For example, in 2014, 72 percent of impressions represented as FT.com on open ad exchanges in a single month were fraudulent, according to CMO. Others estimate the number of fraudulent impressions across these exchanges is closer to 20 percent to 30 percent.

According to Williams, programmatic TV does not suffer the same problem. There are no bots or fraudulent traffic, and television generally has higher-quality controls that govern the broadcast industry, with stations held responsible for aired content. The private exchanges and relationships between buyers and sellers also help protect against fraud.

Differences aside, programmatic TV has the potential to bring the advantages of audience targeting and data-driven decisions to television in the same way the technology has allowed digital advertisers to reach the appropriate audiences. Ultimately, it can help brands solidify their message across platforms, particularly as measurement techniques become unified.

To find out more about programmatic TV, contact Videa.

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