‘No interest in playing your games’: Why programmatic TV hasn’t (yet) taken off

December 12, 2016

By Sahil Patel

This story is part of a Digiday series on Programmatic TV, which examines how TV advertising is trying to act a little more like its digital cousin by introducing automation.

While TV networks are warming up to data-based advertising, it will be a long time before programmatic advertising truly comes to TV — if it comes at all.

Major cable network groups including Fox, NBCUniversal, Turner and Viacom now offer data-based advertising products, which are designed to help marketers use first- and third-party data to make better audience targeting decisions on linear advertising inventory. NBCUniversal’s NBCUx product, for instance, makes inventory available on a few demand-side platforms for buyers to build media plans against. Through its Vantage product, Viacom helps advertisers predict which of its networks and shows would be best for an intended audience.

What these products don’t do, however, is allow advertisers to bid on inventory in real time — like how programmatic advertising works for digital video and display ads. And it’s highly unlikely that TV networks will put up inventory in real-time auctions anytime soon.

TV networks have no reason to go fully programmatic
Of all the differences between TV and digital media, the most important one might be that there is a finite amount of commercial space on TV — roughly 15 to 20 minutes for every hour on the air — and digital is limitless.

“For the national TV inventory, at this point in time, there isn’t a need to have that inventory up for sale in a real-time bidding environment because the marketplace consistently sells out,” said Samantha Rose, vp and director of video investment for Horizon Media. “They’ve taken the steps to better targeting, which is absolutely the first step toward programmatic TV, but there needs to be reason for networks to put their inventory up for bidding.”

There might be an opportunity within the local TV advertising market through addressable TV, which allows marketers to target commercials to individual households through cable and satellite TV distributors. Trouble is, this market is much smaller: There are 42 million addressable households in the U.S. compared to 118.4 million total TV households, and cable and satellite providers have access to only two minutes of commercial space per hour. And most important of all: Addressable is not the same thing as programmatic.

“They often go hand in hand — programmatic can make addressable easier to pull off — but they’re still two separate things,” said Alan Wolk, TV analyst and consultant at Toad Stool Consultants.

Even if TV networks bought in, the technology isn’t there
Digital ad tech is built for internet-protocol-based systems, allowing the inclusion of tags, cookies and other elements that help advertisers track how an ad was delivered to a user. It’s a system that can support hundreds of decisions about which ad to deliver in milliseconds.

This does not exist in linear TV.

“TV is a closed, walled garden with a lot of different proprietary technologies,” said Dave Morgan, CEO of Simulmedia. “The tech has not been built for TV. …read more

Source:: Digiday


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