Three Ways Automation Can Maximize Return on TV Advertising Inventory

December 23, 2018, Brad Smith, Senior Vice President, Revenue & Operations, Videa

 

One of the biggest issues that continues to negatively impact digital advertising is the lack of end-to-end transparency on the buy- and sell-sides about the true effectiveness of ad campaigns. This trend will only continue to compound as more data sets are added to the ever complicated equation for success.

While many of these data sets help to inform decision-making and how to plot a course to the best returns, buyers and sellers don’t always feel they are incentivized to appropriately share critical information. This safe-guarding of information makes it continually difficult for the other side of the transaction to align itself to the customers true end goals. While this has always been a way of doing business in the digital ecosystem, it continues to limit the ability for the buyers and sellers to truly engage and identify the net value of their transactions.

As automation surges and programmatic TV advertising continues to grow, there is an opportunity to re-write this narrative and offer a more level playing field – via greater transparency as well as incentives to be more transparent.

Below, are three significant automation drivers that can get us closer to a functional and more efficient way of buying and selling TV advertising.

More forward-thinking inventory management

By applying automation in a strategic way, traditional barriers that came with the 40-year-old silos of delivery mechanisms will begin breaking down. Buyers will be able to mix and match in a much more optimized way for customers. Those on the sell-side, meanwhile, will be able to do more to begin predicting demand and forecasting the value of their inventory.

That’s much different from how things are currently operating. For example, say a media buyer runs a campaign that only hits 70% of the target audience. Since so much of this process still requires manually determining where to distribute ads in that campaign to compensate for the remaining 30%, sellers may run them on previously reserved inventory that could have netted them higher returns from other buyers.

Yet, when transacting in an automated platform, a seller might be able to compensate for, let’s say, 20% that didn’t hit the target audience by running it through alternate audience subsets, leaving only 10% to run incrementally using previously reserved inventory. That’s an incentive that doesn’t even require pricing changes.

On the buy-side, this means spending less time trying to determine how to utilize makegood compensation to satisfy the campaign’s original target audience impressions. Automating more of the process means getting closer to the target consistently. Thus, buyers are able to confidently run campaigns they know won’t require as much manual work. 

Adjusting pricing based on future demand

Bringing increased automation to programmatic video ads also has the advantage of providing sellers with a greater level of insight into data sets that are valuable to that inventory. Transactions can be done quicker, thus maximizing returns on coveted ad opportunities in demand by buyers. Hypothetically, it would even be possible to automate increases or decreases to pricing based on a set of data parameters.

The advantage for the buy-side means being able to plan out spending with a greater degree of certainty. Buyers can rest assured that a campaign won’t result in waste or heavy fluctuations in media budgeting as automated price adjustments would be more transparent (aka less concern about price gouging) — while having more time to spend refining their campaign to get the maximum ROI.

Creating new inventory subsets

Another key driver will be how sellers will able to start creating new inventory subsets that don’t exist in the present environment. This will require utilizing data sets from buyers as well as additionally available audience data — technology such as ATSC 3.0, the next generation broadcast standard that enables a greater level of targeting. These subsets will broaden the reach for buyers and increase the overall value of the inventory as a result.

And on the buy-side, this also bears fruit. Buyers spend a lot of time trying to compensate for campaigns that don’t hit the target, but with new inventory subsets from sellers they can discover new audiences that otherwise would remain hidden or inconsistent.

Both buyers and sellers would benefit by being able to simplify how manpower is used when finding alternative audience segments to target. Additionally, automation allows for a stronger, more scientific approach to how inventory sets match up with audience segments with limited waste. In other words, no more trial and error testing to get it right.

Only time will tell how soon modern technologies will lead to automation usage in a way that alters how TV ads are thought of among advertisers. What I do see is a trend toward breaking down barriers of delivery — and as you break them down, you’re still going to need tools to reaggregate data and reporting analysis in a way that is meaningful to the advertiser or agency.

The only way we get to a more transparent way of doing business is through greater efficiencies in the overall TV advertising ecosystem. Doing so will lead to big increases in ROI across the board, but there are still changes that need to be made inside the sell- and buy-sides, such as changing skill sets and providing more resources devoted to sustaining automation.

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