The year is coming to a close, meaning it’s time again for predictions to unfold. Programmatic TV is a particularly intriguing topic for speculation because this technology is changing ad buying as the industry knows it. The buzz about the future of programmatic continues to build, and 2017 stands to be a pivotal year, with forecasts—such as Ve Interactive‘s predictions—showing that programmatic spend will likely see a significant jump.
But why only look one year out? Timothy Whitfield, director of technical operations at GroupM, recently shared his prognostications with Which-50 on the future of ad tech into 2020, including what he sees for the future of programmatic TV. Programmatic is hard to predict because, as he maintains, there are still a variety of misconceptions about the true nature of programmatic TV. The reason it’s such a hot topic at the moment is precisely because people are trying to figure it out.
This is good news. Tech talk often leads to action, especially when the solution makes good sense. Programmatic offers a data-driven, automated solution for television ad buying that creates workflow efficiency and allows for targeted messaging. Programmatic leader Videa believes that 2017 will begin with testing and use cases, and then see more scaled TV buying with automated platforms. “The inventory will continue to advance and grow in terms of reach and frequency,” said the president of Videa, Shereta Williams.
A Fragmented Future Is a Good Thing
Whitfield’s main point—that audiences will continue to fragment due to the increasing availability of content across multiple devices—is a given. Viewers want to watch anything, anywhere, at any time, and service providers, content developers, and streaming companies are working hard to meet this demand. “(As a result) there will be an increasing number of people watching ads not linearly through the primary feed, but also non-linearly through an over-the-top (OTT) app or service such as Hulu,” Williams said.
Advertisers gain unprecedented access to consumers, with a plethora of new opportunities for outreach. Programmatic technology is a perfect fit in this brave new world, as it makes it easier to optimize campaigns, and advertisers can generate at least 8 percent greater reach by integrating their strategies across television and digital.
Using programmatic, the buyer can follow targeted viewers from medium to medium and utilize technology to continue a creative thread over time. But doing so requires an ability to measure viewership across devices.
Toward this end, ratings giants Nielsen and comScore are already endeavoring to incorporate all screens and devices into their ratings systems. They will also include more spending, behavioral, psychographic, demographic, and viewing data. There also will be new measurement techniques. “We see this as the most significant area of focus with several new entrants into this part of the programmatic ecosystem,” said the SVP of revenue of operations for Videa, Brad Smith.
The Past Is Ancient History
Whitfield’s final assertion regarding programmatic TV is that advertisers need the ability to buy individual TV shows. The availability of full-schedule inventory for programmatic buying was a concern in the past, but that worry is no longer a factor. Full schedule as well as forward reserve inventory is currently available. Many buyers now have the ability to access any inventory they want, up to a year in advance—an opportunity that is opening doors for media planners.
Networks are also starting to get on board. NBCU, for example, announced in March that it will allow software-based purchasing of its ad inventory, and AdAge reported that Fox is on the path as well, having launched an audience insight tool.
The future of programmatic will not only offer a full range of inventory options for buyers and sellers, it will also enable them to combine and analyze data from different sources to provide more detail than just demographics. By using algorithms, an advertiser will be able to find families, for instance, who are in the process of planning a vacation and have an income of at least $50,000 and no young children—much as digital advertising does today.
Once addressable advertising is achievable at scale, programmatic algorithms will be able to use data to target specific set-top boxes; OnlineVideo.net has predicted addressability will grow to 50 percent of U.S. households by the end of this year.
All of this means that an advertiser, via programmatic buying, will be able to choose from among 50 million U.S. households and serve a specific message during a specific program to a specific target market.
That makes the future of programmatic look pretty bright.