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The Programmatic Promise: Part III

22 April 2014 | Blog

dollar signIn the last two installments of this series, we discussed both the potential and potential pitfalls of programmatic ad sales for television. But what’s the right way to do things?

One of the hallmarks of TV ad sales has been the Upfronts. The highest reach, most prestigious ad placements are sold in advance, through long-standing relationships between ad sales teams and media buyers. One of the common disparagements of programmatic buying is the declaration that embracing programmatic means doing away with the traditional methods of doing things, switching all inventory over to impression-based, automated systems.

Nonsense.

The current ways of selling premium inventory work. Media buyers have longstanding relationship with their ad sales reps because they trust them—through years of working together, each understands what the other needs and knows how to work together to find the best placement for each advertiser. Together, they have the experience to match context and audience composition to advertiser needs. For premium inventory, that human touch is critical.

Some inventory is still under-utilized, however. Its audiences are small and fragmented. Each viewer is still someone’s valuable potential customer, but the viewers are spread across so many different programs, networks, and dayparts that strategically matching the best message to any given audience segment is an impossible task to do by hand. Here is where programmatic has the most potential. Aggregating audiences from across a portfolio and using automated business rules to divide them into audience segments and deliver appropriate ads makes the under-utilized inventory far more valuable.

One way inventory holders can accomplish this is by selling their inventory through an external programmatic platform like AudienceXpress. The inventory from multiple inventory providers is aggregated, protecting the confidentiality of any one holder and leveraging the reach of multiple publishers.

Another way that is becoming more popular among digital publishers is to create an in-house programmatic platform. For example, Forbes has added its own programmatic channel to its existing sales channels, with great success. The Folio article “The Rise of Programmatic Advertising” notes

While some publishers worry about programmatic undercutting premium business, Forbes has not found that to be true. As more money moves toward programmatic buying, the company chose to shift in order to accommodate the growing trend.

As we discussed last week, TV is a few steps behind digital on the adoption curve. But that’s hardly a bad thing in this case. Here, it’s possible to watch what digital publishers are doing and avoid their mistakes while employing their best practices. And licensing a programmatic TV tech stack to enable in-house programmatic ad sales is looking like an increasingly smart move.

Programmatic as a sales and buying technique is clearly not only happening today, but on the rise. (Jerry Neumann’s post on the Innovation Adoption Lifecycle makes short work of any claims that poll results showing a lack of familiarity with programmatic indicate that the technology is failing to catch on.) And that’s a good thing—while programmatic promises to infuse more value into the TV advertising ecosystem, a lot of the fears coming out of the digital programmatic space don’t really apply to TV. It’s time for TV inventory holders to take matters into their own hands. Agencies are interested in spending more money to reach the audiences they need—shouldn’t TV publishers make it easy for them?