Programmatic TV vs. Programmatic Digital – An Explanation
Programmatic TV Isn’t the Same as Programmatic Digital – It’s Not Even Close
Written by: Paul Murray
We’ve been seeing a lot of press over the past few months on programmatic TV. Programmatic TV has been in test since last year. It gained a lot of attention with a programmatically bought spot during this year’s Super Bowl.
If you’ve seen anything on programmatic TV, your takeaway might have been something along these lines: “Great. Programmatic. That’s produced very efficient, measurable results in digital. Sign me up for more of the same with TV.”
Right now, here’s what you should know about programmatic TV and how it’s different than digital.
Programmatic digital (PD) is based on machine-buying of audiences in real time based on extensive data sets. Programmatic TV (PTV) is people, not machines, buying TV across shows, with limited data beyond ratings. It is still mass media, not buying specific audiences as in PD. PTV uses product data, but it’s a fusion-like application of Experian, MRI or other product and demo data on top of Nielsen or Rentrak ratings.
PD optimization is instantaneous based on site metrics and results and done so with little or no human interaction. PTV can be optimized, in the short term, if commercials include a call to action that route through a call center or website. Optimization of this sort is limited by call center reporting lag, the lead time required to buy PTV, inventory constraints and requirement for human interaction. Turnaround from initial buy to optimization could be up to several weeks long.
Inventory for PD, including video, is almost limitless. The universe of websites hovers between 900 million and 1 billion worldwide, producing almost 14 billion available impressions each day in the U.S. Sites have pages and pages of content that can carry ads. Compare that to the less than 1,700 commercially-supported broadcast TV stations and cable networks in the country. Combined, these stations have an estimated daily inventory of approximately 5.2 million combined national and local 30-second ads to sell, not including zone-cable avails.
At best, programmatic TV is automated TV buying. As it stands now, programmatic TV is essentially DRTV by other means. Networks and local broadcasters are testing programmatic solutions. They still have perishable inventory. Programmatic TV offers them a more efficient way to sell to direct response advertisers and remnant buyers.
We continue to watch developments in the programmatic TV space. While it’s not the same as programmatic digital, we see potential applications as part of an overall strategic approach to media mix and channel optimization. But it has a way to go. When fully realized, the promise of a more data-driven approach to TV planning and buying will provide significant advantages in audience targeting, measurement of results and operational efficiencies.
From a broader perspective, this evolution in TV advertising is a small step toward cross-device attribution modeling that encompasses all video and audio advertising. And it gets us closer to answering a decades old frustration.