Programmatic To Account For 20% Of TV Ad Spend By 2018

What real-time bidding (RTB) was to online display advertising in 2013, programmatic will be to television advertising in 2018.

How’s that? eMarketer projected that 19% of U.S. digital ad spend would be via RTB in 2013. Research firm Strategy Analytics on Thursday said it expects 20% of TV ad dollars to be spent via programmatic by 2018.

On some level, that's comparing apples to oranges -- RTB for online display is vastly different than the “programmatic” television we currently see. But while the amount of automation varies, the general premise is the same: Use data to be more efficient and effective with ad buys.

Strategy Analytics has a new report featuring programmatic buying and its role in television advertising, and author David Mercer, vice president and principal analyst, gave RTM Daily a look at the executive summary.

The report notes that television-based programmatic ad buying accounted for less than 1% of TV ad dollars spent in the U.S. in 2013, but as previously noted, the research firm expects that figure to grow to 20% within five years.

In order to reach that point, the report says that standardized APIs for TV-based programmatic buying are needed.

The report highlights education, technological limitations, control over pricing and increased competition as challenges. It calls workflow efficiency, price efficiency, new revenue opportunities and data-driven buying opportunities the biggest benefits.

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1 comment about "Programmatic To Account For 20% Of TV Ad Spend By 2018".
  1. Ed Papazian from Media Dynamics Inc , May 16, 2014 at 4:06 p.m.
    Frankly, I don't buy the estimate, cited in this article at all. It's not a question of old fashioned media folks hanging on to outmoded ways of selling and buying time. It's really a question of a computerized system's ability not only to maximize targeting and revenue yields, but, also, to handle all of the post buy servicing and renegotiations that are required. Also, there is the little matter of the upfront, which requires seller and buyer to estimate audience delivery by program, by demo, by quarter----when no such data is available thanks to so many new shows and time slot shifts. How does that get done? And once the real numbers come in, how are the required adjustments and trade-offs made?