Commentary

Hurdles Remain For Programmatic TV

Despite bullish forecasts for programmatic TV (PTV), there are a few hurdles that must be overcome in order for more dollars to start flowing into the channel.

In June, eMarketer projected that PTV spending would increase 127.8% to $710 million this year which is just 1.0% of total TV ad spending. But the digital research firm projects that figure to increase to 6.0% by 2018, when U.S. advertisers are estimated to spend $4.43 billion on PTV advertising.

Whether this happens or not, there are very real challenges for PTV's growth. RTBlog spoke with John Roland, CEO, Extreme Reach, a software as service platform provider for TV and video, about the roadblocks.

RTBlog: What do you see as the challenges for programmatic TV growth?

John Roland: One of the challenges is that there’s very little inventory available. It will take time to get the inventory from major national networks. But we’re seeing local broadcast stations entering the market.

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Before you can run a PTV campaign, you have to track down the commercial you want to use—which means going to the creative agency and requesting the right ad ID, if you know it. Then you need to get permission to use the ad, the agency has to figure out how to send it to you, and then you have to acquire talent rights to use the ad to avoid potential penalties from the Screen Actor’s Guild (SAG).

RTBlog:There are a lot of steps involved.

Roland: Extreme Reach handles all of these things in an automated way through our API. We’re working with trading desks, supply-side platforms, publishers, and other stakeholders to help automate this workflow. Advertisers can buy programmatic TV campaigns today—but when it comes to running them, it can take days or weeks to get them up and running. 

You might have bought a PTV campaign, but you have to stop to find the ad you want to run—which agency has it? You might not know the ID of the ad because there are so many versions of the ad, and then you have to get permission to run it from the advertiser or the agency. And the biggest obstacle of all is the use of talent in the ad—you have to have the digital rights from SAG to use the ad if it has voiceover, actors, music, etc.

We have an API that programmatic companies tap into in real time. It can power PTV and programmatic video campaigns.  With some local PTV buys made across multiple stations, you can begin to rival a national broadcast TV buy.

RTBlog: Obviously, the broadcast and other networks prefer to do direct deals. But there’s so much TV content now. How much longer can they hold back?

Roland: The major networks are slowing programmatic TV down because TV has gotten very fragmented. You’ve got all the over-the-top [OTT] companies—Amazon, Hulu, Netflix—and more coming online.  More and more TV content is coming online, so networks will have to be part of it.

RTBlog:Does programmatic video face the same hurdles?

Roland: From the media side, you can make a media buy across publishers in real time. For example, Coke can buy a campaign across 100 publishers. But Coke also has maybe a dozen agencies. You have to untangle which agency created the ad or ads you want, get the permission to run the creative, and get the talent rights.

Even on the programmatic video side, digital agencies are making the creative, and they use their own ad servers. There are still problems with the workflow. Sometimes the digital and creative agencies don’t get along.

RTBlog:Who’s in your competitive set?

Roland: There’s Comcast Ad Delivery and AdStream, but they’re only in the TV business. For talent rights, there’s TEAM Services and Highland Talent Payments. For video, Innovid and others. But the key is that all of them only offer partial solutions for TV, video, and talent rights.  

Advertisers care about getting their message in front of their audience wherever they are, and then optimizing that message in real time. We’re really the steward of the advertiser and their agencies’ assets. The advertiser and the agencies trust us to have the highest quality version of the ad and know that we have strict permissioning—we only release an ad when the agency  approves it. We only release it if talent rights are secured.  Our system operates in real time.

RTBlog: What’s the key takeaway here?

Roland: We need to educate the market. Some people don’t even know what talent rights are. Everyone only sees their link in the chain—the digital video people only see that they’re selecting the ad server, then maybe they have an intern find the ad, etc.

Everybody would be most successful together, if we looked at the world as the advertiser sees it. Silos don’t work.  No one is talking to each other, but if they could all work together, across any screen or device, that’s the message I want to get out. When all the silos come down, the concept of digital and TV doesn't even exist anymore. It’s just video that goes on any IP-based screen.  

1 comment about "Hurdles Remain For Programmatic TV".
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  1. Ed Papazian from Media Dynamics Inc, September 20, 2016 at 3:20 p.m.

    I'm afraid that the "few hurdles" blocking the advancement of programmatic TV into "linear TV" are the size of the Alps, Tobi.

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