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Demand For 'Programmatic TV' Outstripping Supply

  • Beet.TV, Monday, January 12, 2015 4:06 PM

“Programmatic TV” may be poised for growth this year, but according to Rhys McLachlan, global head of TV strategy at Videology, demand currently exceeds supply.

“There is a huge amount of receptivity from the demand side - ad agencies have woken up to the efficiencies programmatic can bring - though we are somewhat behind the ball as it relates to the datasets, to provide efficient measurement,” McLachlan told Beet.TV in an interview.

“And there is a lot of legacy infrastructure as it relates to the technology the broadcast industry uses to distribute their content. There is a lot of work still to be be done to provide a truly holistic platform for programmatic television. Asia-Pacific will move very quickly – they don’t quite have the same legacy constraints,” McLachlan added.

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2 comments about "Demand For 'Programmatic TV' Outstripping Supply".
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  1. Ed Papazian from Media Dynamics, January 13, 2015 at 8:42 a.m.

    One of the core selling points of "programmatic" TV time buying is the ability of the trading desks to scan vast aggregations of "avails"from hosts of channels and determine which ones offer the best targeting at the most efficient cost. Recently a major cable channel announced its willingness to sell time in one of its ongoing "talking head" shows "programmatically"----while selling time in the program the old fashioned way as well. I assume that the cable channel is offering spots to "programmatic" trading desks at double or triple its usual CPMs and, perhaps, some novice advertiser will buy a few spots in this manner. But what about comparisons with alternatives? If this is the only offering for the computers to consider, is such a buy really "programmatic" ? Are spots on this show the most efficient way to target the advertiser's marketing prospects? Of course not. To make programmatic work the way its advocates propose, you have to get most of the sellers---not one channel for one TV show-----to participate. And you have to have all kinds of TV included, not just "non-premium" time----which usually means a few extremely low rated shows on some digital channels, plus broadcast or cable fare that runs at 3AM in the mornings. Otherwise, you are simply using computers to place orders, not to maximize efficiency or to elevate targeting to "undreamed" of heights. Some people honestly think that 5% of TV time will be bought programmatically this year while the starry eyed dreamers believe that figure will go as high as 25-30%. In reality, almost zero is more like it----assuming we mean "programmatic" as we are told it should be applied.

  2. John Grono from GAP Research, January 13, 2015 at 3:57 p.m.

    Well said Ed. Programmatic works best (i.e. effectiveness and efficiency) when any and all spots are available to buy programmatically. When a sub-set only is made available it is still fine to trade as long as you are content with buying 'tonnage' to bolster the mass of the buy - and accept that the seller has in effect controlled both the supply and the floor price. Having said that, with audience fragmentation requiring more advertising vehicles to be bought in order to get the required mass of the buy (see Byron Sharp's 'How Brands Grow' to understand why mass is still required) it does introduce efficiency into the buy as the media agency can focus on wheeling a dealing on the 'grunt' of the buy, and leave the 'rats and mice' filler (i.e. the unexpected 'reminder' spots) to programmatic buying.

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