The programmatic involution of traditional media

by James Hansen on Thursday 17 November 2016

Methods of buying programmatically are expanding, never before have there been so many ways to reach our targeted audiences.  Some of the most exciting innovations of recent months have focused around the inclusion of methods previously available only to traditional marketers. Programmatic buying is bringing change, relevance and competitiveness back to traditional styles of advertising in the digital space. Programmatic offers the ability to streamline, automate and optimise the process of purchasing advertising space, whilst operationally being more efficient, it also allows for buyers to access a much larger pool of inventory.

 

The advent of the TV revolutionised the way in which the public consumed media and created a new platform for advertisers to take advantage of. Traditional TV can still be considered as the gold standard to gaining effective reach within a campaign, to an extent this statement is still true. With TV advertising market size value at around $200 billion worldwide, accounting for about 40% of all ad spending, it seems ridiculous to think that TV is facing any challenges. However, IDC expects Programmatic TV ad spend to be around $17.3 billion worldwide by 2019, proving that there is a growing need for TV broadcasters to jump at the chance to be early adopters.  


The TV landscape has changed forever with the introduction of Online Video providers such as YouTube and traditional TV’s online offerings.  Traditionally TV buying is seen as a lengthy process that is now dated, Programmatic offers a way in which to solve this issue whilst also addressing the challenges that linear TV faces with generation Y and Z around how they are consuming media. 


The TV industry is facing unprecedented pressures from inside the industry with the constant competition over ratings and externally as buyers push broadcasters for access to better inventory with growing preference for targeting online – allowing the ability to optimise performance in real time and create more compelling campaigns. TV broadcasters have been slow to catch onto Programmatic, this is because they hold the conception that Programmatic lowers the value of their inventory and reduces their control over who buys their inventory.    

 

Many TV broadcasters have worked around this problem by offering their ad space through private market places, platforms where inventory is sold more exclusively, and where price floors can be introduced to ensure a minimum bid is always reached. Programmatic TV bridges the gap between linear and online media consumption creating a more attractive offering for broadcasters.


As usual, America is leading the way in Programmatic buying with both Hulu and NBCUniversal who have expanded to include linear TV with their online VOD offering. Hulu and NBCU are some of the first broadcasters to utilise Programmatic. eMarketer reports that nearly 70 percent of UK and US marketers have moved TV ad budgets to programmatic video. It also estimates that this year, US programmatic digital video ad spending will soar 212 percent to $2.18 billion, which will make up 28 percent of total digital video ad spending. Programmatic TV builds upon traditional buying, it is typically referred to as Advanced TV buying by implementing more detailed data, producing greater engagement through an enhanced viewer experience and providing greater measurability during and after the campaign as opposed to only after the campaign. 

 

Another stream of traditional advertising that’s embracing the benefits Programmatic has to offer is audio advertising.  Spotify are offering their ad space Programmatically targeting non-subscribing members of the service, those who listened to advertisements previously bought manually.  This is an exciting expansion as it is an entirely new format for Programmatic, one that can potentially produce high levels of engagement and reinforces the argument that Programmatic buying should be part of any media plan – not just to clear up ruminant budget. Spotify are leading the way as they are the only on demand audio service to offer Programmatic ads currently, however once again deals with Spotify are currently only available through the private market places.

 

With the ability to target TV and music, advertisers can now target across more touch points than ever before, creating more than just a cross-device campaign but a cross activity campaign including digital OOH – enabling viewers to be told a story of the brand and build more of an emotional connection. What is exciting about the increase in traditional media being processed programmatically is the fact that great efficiencies can be made quickly. Data can be used to a much greater effect through targeting and the simplicity and efficiency that comes logistically from using one platform to manage all communication mediums for a campaign.


Advanced TV and music streaming services are the first step for traditional media staying competitive and becoming part of the digital age of marketing. We at Forward3D are always looking for new ways to meet and exceed client’s goals, and are excited to use these new media types in new and interesting ways to push the boundaries of what is possible with Programmatic.

 

James Hansen - Programmatic Analyst