Programmatic TV: Bringing Sexy Back, Ad Dollars, Too

Melanie is a colleague of mine who is an exceptional marketer.  Melanie is also a self-described shoe fashionista.  She has a collection of shoes that fills the space under her desk at work -- and this is just her work shoe collection.  I can only imagine what her shoe closet at home looks like. 

Digital marketers know plenty about Melanie’s shoe shopping habits, along with the habits of her fellow shoe fashionista friends.  They know she shops at Gilt, Zappos, Rue LaLa and Nordstrom.  They likely know the type of shoes she’s going to buy almost as soon as Melanie knows it. But in TV, we’ve known so little about Melanie -- in fact, all we know is that she is a female, aged 18-34. So until now, we haven’t been able to get a clear or useful sense of the audience Melanie inhabits.

Programmatic TV is changing all this.  In simple terms, programmatic TV uses all the data from digital marketing and applies it to TV in order to follow an audience on TV.  So, we now are using Big Data to learn that Melanie and her shoe-shopping friends watch Comedy Central late night, Discovery in prime time, and E! on the weekends. Programmatic TV is allowing TV planners and buyers to be much smarter and more precise in the ways they’re reaching their audiences on TV.

Of course, using audience data in TV is nothing new.  Simmons and MRI have been conducting TV audience surveys for decades, and it’s now becoming ubiquitous to fuse audience data with set-top-box data – a capability lots of companies are using -- to discover what audiences are watching.  But most of these initiatives use TV audience data for planning purposes only.  In order to reach audiences at scale, the use of TV audience data must go beyond planning. We need the full arsenal.

Programmatic TV Brings the Arsenal
Here’s what is starting to ignite the media industry at large: programmatic finally takes TV audience data beyond just planning and into campaign optimization. We now have the TV ad tech to automate and optimize campaigns based on dynamic audience viewing patterns. So when Melanie and her friends start watching more FX in a few weeks, programmatic TV will predict that shift and adjust the campaign accordingly. Programmatic TV shifts TV from “plan it and run it” mode to an automated “plan it, follow it, and optimize it” dynamic system.  This wonderful bit of evolution draws the automation, audience data, and flexibility from digital and applies it to TV.

Why Does TV Need to be Better?
TV is a nearly $70 billion industry in the United States, and the undisputed leader in the media ecosystem.  No other medium even compares to the instantaneous reach, engaging storytelling, and captivation that TV has.

With those credentials, why does TV need to become programmatic? Why is this evolution on the TV front essential to the evolution of the media economy as a whole?

Well, while TV is still big, it has remained fairly flat over the last five years, losing a lot of share to digital ads. In 2008, TV executive Jeff Zucker uttered the sentiment heard ‘round the hallowed halls of Madison Avenue:  “Why would I trade my analog dollars for digital pennies?”  Last year, however, he recanted, stating that those dimes are starting to look like 50-cent pieces, and may one day be dollars.  It’s a turning point, indeed. 

Marketers and their agencies have fallen in love with the data and optimization they’ve been getting from their digital campaigns, while TV has continued to use basic age and gender demographics.  Age and gender are fine for­­­­ currency, but TV needs its mojo back.  It needs parity on optimization capability, and programmatic makes that happen.

What is specifically on the horizon for programmatic TV?  Measurement, digital style. With all the Big Data we now have at our fingertips, TV brand advertisers want to know what kind of sales lift, lead generation, or any other business metric their brand campaign delivered.  Programmatic TV is in the early innings of measurement, but in five years, all TV brand campaigns will require some type of measurement.  If there is one lesson TV can learn from the extraordinary growth of digital, it is this:  when a campaign can be measured, the dollars will follow.

What is programmatic TV’s ambition?  To bring the sexy back to TV–and the dollars, too!

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