As you might imagine, TV advertising is big business. By some estimates, the amount spent on TV advertising each year surpasses the $80 billion mark. Historically, the bulk of this money is spent during upfronts week, which is when TV networks enthusiastically show off their latest round of programming, and advertisers opt in on the programs where they’d like to have a presence. Any ad inventory that’s left over following upfronts is sold, typically for a much lower price, on what’s known as the scatter market.
This is how the TV advertising industry has operated for years, with very few disruptions or new innovations. It certainly has its advantages, but also its inefficiencies. These inefficiencies boil down to a simple fact: A lot of traditional TV ad buying is still done manually, which requires a lot of work (and imprecision) on behalf of advertisers.
Unsurprisingly, the ad industry—taking some cues from the digital landscape—has been hungry for a new, more efficient way to buy TV airtime. In recent years, digital TV ad buying has become programmatic in nature; enCOMPASS buys digital TV ads programmatically all the time, and we’ve long predicted that broadcast TV ad buying will follow along this path. It looks like that day may be coming soon.
What is Programmatic?
We’ve written about programmatic advertising before—but what does this term mean with regard to television? Briefly, we’d define programmatic ad buying as a data-driven and largely automated way to purchase ad space and deliver those ads within TV content. Note that this would encompass any TV ad that’s served —and soon Linear TV ads could also fall under this umbrella.
To be clear, programmatic probably isn’t yet sophisticated enough to become the industry standard for traditional broadcast TV, like it currently is for digital TV. There’s still some work that needs to be done. We’re getting very close to the point where we see a big rush toward the programmatic model, however—and it’s not hard to understand why: Programmatic ad buying offers a number of significant benefits.
For example, one benefit to programmers is that they will be able to provide their advertisers with more data and more accurate targeting of their ads. This will lead to a more valuable inventory and the ability to serve different ads within that commercial break, which could also increase the amount of inventory they can sell.
There are benefits for brand advertisers, as well; specifically, they’ll be able to more precisely target their ads, using meaningful data to display their message only to the specific consumers they are trying to reach.
And don’t forget that programmatic is a win for viewers, too, who won’t have to sit through as many repeated ads, or ads that are irrelevant to their interests.
Many of these benefits are already being realized in the world of digital TV ads; it stands to reason that traditional TV ad buying will follow suit, just as soon as the technology for it is available.
Why Advertisers Should Be Excited About Programmatic
For our purposes today, we’d like to take a closer look at the benefits that brand advertisers can anticipate from the programmatic revolution. We mentioned already the increased capacity for precision targeting. In addition, take note of the following:
- Automated buying. Again, it’s important to remember that broadcast TV ad buying is largely done manually. Programmatic ad buying will allow advertisers to establish automated processes and cut down on the manual labor, leading to a more seamless and holistic view of the ad buying process.
- Cross-screen metrics. One of the pain points that advertisers face today is the difficulty in measuring their ad efficacy on traditional TV and cable buys —but programmatic will provide a more robust and integrated way to engage with data.
- Real-time optimization. Programmatic ad buying allows advertisers to get data in real time, while automated algorithms use that data to make adjustments on the fly. Contrast this with traditional ad buying, where metrics often aren’t available for days, weeks, or even months. Having this immediate measurement available for broadcast and cable TV buys would benefit all parties involved.
These are just some of the reasons why we think brands should be excited about the move toward a programmatic model. Ultimately, these are also the reasons why we think programmatic is coming soon and will quickly become the standard in both digital and traditional broadcast TV ad buying.
Get in on the Ground Floor
The team at enCOMPASS has already worked closely with clients on programmatic ad buying, and we’re standing by to see how and when this model takes over all TV advertising. For now, we’d love to tell you more about the perks of programmatic, and to advise on how your brand can prepare for it. Reach out to us any time you want to chat.
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