The advertising industry continues to evolve. It is a field where pioneers adopt new technologies and experimental approaches. Programmatic is one of the key trends that impact internet advertising, and connected TV advertising in particular. It is essential to keep up with the pulse of programmatic trends. What is programmatic TV advertising?
Simply put, it is the technology that automates the ad buying process. This implies algorithmic interaction between DSPs (Demand-side-platforms) and SSPs (supply-side-platforms), based on reach, target, and pricing criteria set by an advertiser. So what is all the fuss about? Here’s an example: by 2021 almost 90% of US digital advertising will be programmatic.
And that is over $80 billion annually. In spite of programmatic video advertising lagging (which is due to the relative infancy of this field) behind the rest of the digital industry, its volume increases each year. This progress is visible for both linear and non-linear TV ad placement.
Programmatic Reigns Supreme
The role of programmatic in digital advertising is growing annually. Some markets are even forecasted to reach a near-100% level of programmatic digital media trading in a year or so. When it comes to TV, however, it’s not that overwhelming. Traditional TV advertisement buying mechanisms remain manual for the most part.
Counting, e-mailing, negotiating, spreadsheeting, and the rest of the -ing are things that harm precision and effectiveness all over the industry. Currently, only around 7% of yearly linear TV ad spending is programmatic. Despite the clear dominance of manual buying, both linear and digital TV ad placement fields are growing.
The stats that many TV advertisers are not aware of yet show that programmatic technology is beneficial for all sides of the TV media spectrum. Programmers, viewers, brand owners, advertisers – everybody benefits from more relevant targeting, faster transactions, comprehensive statistics, and precise analytics.
A combination of these ensures better ROI rates compared to traditional TV media buying. Connected TV platforms are gaining momentum in programmatic too, and this demands some special attention.
For instance, the Roku platform currently has over 40 million unique active accounts, with the real number of viewers being even higher than that. These numbers climb higher every year, concurrently with the revenue Roku collects for their channel owners.
Key features of programmatic TV for advertisers:
- Automated buying. The traditional buying workflow includes planning, manual insertion of requests, boring .xlsx reporting, back-and-forth negotiating between buyers and sellers, you name it. With programmatic, advertisers only need to specify trading parameters like price, volume, desired audience, and region. The rest is done by a robot;
- Data-driven targeting. Programmatic advertising is data-driven. This means the system operates on the anonymous user data collected from cookies and other web-traffic sources to personalize ad content. The ads become more relevant for a specific gender, age, or geography;
- Cross-screen analytics. With programmatic, advertisers are now set to measure the effectiveness of their TV ads right from the start of a campaign. Impressions, ad completes (for video ads), skip rates, and other metrics can be measured across different platforms in a matter of clicks;
- Near real-time campaign optimization. No need to wait for the completion of a given ad campaign to get performance metrics and optimize its parameters accordingly.
Programmatic TV is data-driven, fast, precise, effective, and cost-efficient. It is changing the ad industry as we speak. With this technology, advertisers can properly monetize their ads regardless of niche or screen size, while users can enjoy less repetitive and more relevant ads.
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