"On TV And Video" is a new column exploring opportunities and challenges in programmatic TV and video.
Today’s column is written by Lauren Moores, vice president of analytics at Dstillery.
Go to any ad tech conference this spring and you’re sure to hear people buzzing about how digital video – specifically mobile video – is expected to lead the way in programmatic ad spending.
As programmatic transactions are expected to reach a 62% share of US digital display spending this year, it’s easy to understand the buzz. But while digital video is a hot topic, there are actually some compelling new opportunities in the traditional video market, otherwise known as TV.
Creative combinations of digital data with offline data are beginning to influence the traditional TV advertising market in important ways. We are finally seeing progress in using digital and physical behavioral data to direct TV advertising buys with more intelligence than the old legacy audience assumptions based on demographics, culture or viewing habit recall.
This is significant, especially considering how much money is still spent on TV. Advertisers will spend about $79 billion on TV ads this year in the US, which is a 42% share of total ad dollars, compared to $58 billion spent on digital ads, according to Strategy Analytics. And eMarketer predicts that total ad spending on traditional TV will continue to rise, albeit at lower rates than digital video.
Using data to buy TV advertising differently – either by finding new shows in the scatter market or by placing addressable buys – is the precursor to the eventual advent of programmatic TV.
In 2013, Simulmedia was already doing show-level targeting based on audience data. Simulmedia uses data mashups to help marketers find the long tail of TV content by facilitating buys across the scatter market for spots that match marketers’ audience interests. Marketers get broader reach and more specific targeting, compared to buying chunks of upfront TV ads based on assumptions of a new show’s content appeal.
Household targeting, also known as addressable TV, has been with us for a while given the availability of set-top box data, but it has not been a large portion of overall TV advertising. There are new players in the audience intelligence market, however, strengthening the connection between digital insights and traditional ad buying by building marketer audiences based on digital behaviors. Tests are underway with Cablevision, DirecTV and other MSOs.
So how does this relate to programmatic? For TV, programmatic means the system of data exchange is automated. Although there is currently a minuscule amount of TV advertising sold programmatically, the industry is evolving to use data to buy spots by audience. AOL just announced its FourthWall partnership, which speeds up the transmission of data from TV set-top boxes to data management platforms, a significant step toward using real-time data to make spot market buys.
In the future, traditional TV buys and digital video buys will be similar to our current programmatic landscape for desktop and mobile, where audiences can be reached through both private marketplaces and the real-time market. Until then, we can take the relatively painless step of combining digital data with offline data to inform traditional media targeting and planning. This will ease the transition to the big data programmatic world of TV in the future.
Digital data offers a wealth of opportunities to find audiences. Advertisers should explore the full scope of those possibilities, including using data to deliver messages on traditional channels.