Blog

The Programmatic Promise: Part II

15 April 2014 | Blog

questionLast week, we discussed why programmatic TV ad selling and buying is so exciting. Over in the digital world, programmatic has spread like wildfire, with estimates as high as 85% adoption rates. But all is not happy in digital programmatic. How can TV avoid some of the same mistakes?

ANA and Forrester recently released a reporting on programmatic buying that included some disturbing numbers. For one thing, they found that only “54% of marketers say they have used programmatic buying in the past year”, as reported by MediaPost. It’s still a pretty big number, but nothing compared to the 85% Winterberry and IAB claimed last fall. Even worse, as Ad Age noted, only 33% of respondents actually felt like they really understood what “programmatic” even meant well enough to use it.

It’s obvious that there’s still a lot of education left to do. Programmatic infrastructure can be confusing, and a lot of the practices are a very different way of doing things than marketers are used to. That holds doubly true for the more traditional world of TV when compared to digital.

And there are other potential problems. Some publishers have found that open auctions have the potential to drive down their CPMs. An already-old joke holds that RTB—real-time bidding—actually stands for “Race to the Bottom”. Even more disturbing are the growing reports of fraud.

As ANA president Bob Liodice noted to Ad Age, “We may have grown up a little too fast.”

And here’s where TV has an advantage. As we noted last week, TV’s legacy systems have slowed down the advance of programmatic buying. It’s not an insurmountable hurdle—groups like AudienceXpress, which uses Visible World’s technology, have already integrated with those systems to offer the precision of programmatic buying to TV. But it’s been just enough of a slowdown for TV inventory holders to be able to monitor the progress of programmatic and learn from digital—both the successes and mistakes.

Take RTB, for example—while commonly paired with programmatic selling, RTB is not the only way to sell advertising inventory. TV inventory, with its greater reach, is arguably significantly more valuable than most digital inventory. It’s possible to set up sales portals that protect the value of that inventory, allowing advertisers to get a fair price but preventing a sudden rush to unworkable pricing. After all, the only way that TV inventory holders will continue to put quality inventory on the market is if they can get a fair price for it. Many digital publishers moved their premium inventory sales back in house after poor experiences with exchanges; TV publishers have the opportunity to avoid a costly lesson and set up their own markets the right way to begin with.

As for fraud—TV offers a greater accountability than digital is able to promise. Careful reporting will ensure that TV buyers do not suffer the same loss of faith as some of their digital brethren.

In the digital world, programmatic may have grown up too fast. But in TV, the pace of growth may be just right. Next week, we’ll talk about some more of the lessons people are learning.