Programmatic TV: Promises And Pain Points

randycookeddt“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Randy Cooke, vice president of programmatic TV at SpotXchange.

Television advertising has always been a relationship sell, but sometime during the late ’90s, technologies designed to streamline operations and facilitate transactions began to encroach on that relationship.

You know these technologies well: clunky stewardship systems, awkward e-business platforms and antiquated inventory management tools. Many are still in use. The very technological innovations once designed to improve the operational efficiencies of the industry are now some of the biggest friction points in the transaction.

Alas, a healthy skepticism of programmatic TV prevails, and whether or not it will fundamentally offer substantive value in the grand scheme of things remains to be seen. However, I believe TV sellers will one day appreciate its value because programmatic TV will ultimately help them surface and monetize consumers more efficiently and effectively than ever before.

Streamlining Audience Fulfillment

Much of the talk around programmatic TV has been process-oriented. To be sure, the current linear business model can and must be streamlined, but this alone doesn’t realize sufficient enough value to networks, stations and MVPDs to offset the very real concerns they have about programmatic TV and its long-term effect on their business.

Truth be told, the buy-sell portion of the transaction isn’t really that much of a pain point on the TV operator side. The real challenges for operators in this day and age lie in the amount of effort and resources required to manage audience fulfillment. Here’s a hypothetical example:

A spot TV buyer purchases 300 GRPs on a cable interconnect for a 12-week flight and 600 spots across 15 networks. The schedule underdelivers by 40% in the first week of the flight, and the seller plugs in 50 additional no-charge spots in the following week to offset the GRP shortage in the first week.  

In week two, the campaign delivers at 70% for the week and the campaign to date is now pacing at 65% to goal. The seller adds more spots the following week and continues this process through the end of the campaign.  

At the conclusion of the flight, the seller has run a total of 1,500 spots (vs. 600 ordered) and delivered audience to only 80% of goal.

Streamlining the process of linear TV transactions as the raison d’etre of programmatic betrays an opportunity to bring substantive value to TV sellers around the world.

Rethinking Programmatic TV

Maybe we should rethink what programmatic TV should be since the questions being answered aren’t necessarily the ones being asked. Most descriptions of programmatic TV have been somewhat ethereal, with an underlying tone of unmistakable certainty: This will be the way all TV is transacted in a few short years.

Perhaps.

But as a TV seller, the inevitability of programmatic TV isn’t necessarily a reason to jump on the programmatic bandwagon today. The answer to the question “Why programmatic?” has yet to be answered beyond the buzzy bromides of better yield management.

Pain Points

Here are three questions I think get to the pain points of linear TV sellers around the world:

  1. What if a TV seller could look into his linear inventory and know, in real time, the probable value of every future avail?
  2. What if the seller could holistically optimize every one of his advertisers’ campaigns across linear, digital and mobile based on a probability of fulfillment?
  3. And what if that seller could gauge, with a high degree of certainty, how well a future campaign is likely to perform, as it’s being negotiated?

Linear TV sellers must be empowered with the ability to predictably and deliberately fulfill campaign audience commitments, irrespective of how audiences choose to consume video. Content discovery has turned individuals into their own programming directors, armed with more content than they could possibly consume in a lifetime.

Within this emerging reality, programmatic TV will prove its value to TV sellers by enabling them to efficiently and effectively reach these individualized programming directors.

Follow SpotXchange (@SpotXchange) and AdExchanger (@adexchanger) on Twitter.

 

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