Commentary

Programmatic TV Is A Job Creator

Editor's Note: Here's a post from last year about one of the (perhaps surprising) benefits of programmatic TV:

With each week, it seems that more TV networks and media agencies are embracing the future of programmatic TV. The benefits for TV advertising are simple and straightforward: Automation and audience data benefit all the players in the ecosystem. But now the question on many minds is coming up with greater frequency, often in a hushed aside, “Is this all really a job killer?” The answer is “No.”  Programmatic TV will not kill jobs. In fact, just the opposite is true. Programmatic will create jobs in TV advertising.

Because this question has come up quite a bit lately, I’ve been researching the impact innovation and new technology has had on the financial services industry. Industry analysts often look to the financial services industry as an analog for the media business, given many of their similarities.

Today, the TV industry is going through an evolution similar to what the financial services industry experienced in the ‘90s.  Deregulation of financial services in the ‘80s unlocked a wealth of innovation in the decades to come. Innovation brought about the era of electronic trading, new financial instruments and methods of credit scoring. Automation, big data and advanced analytics redefined the industry. And these changes brought substantial value to the financial services ecosystem. The industry grew, from generating 20% of U.S. corporate profits in 1990 to over a third today. 

But was all this innovation a job creator or a job killer? In their comprehensive paper, “Wages and Human Capital in the U.S. Financial Industry: 1909-2006,” Thomas Philippon and Ariell Reshef (from New York University and the University of Virginia, respectively) determined that innovation had a major positive effect on financial jobs, particularly in the securities industry.

First, salaries rose significantly as jobs became more complex. The stock broker of the early ‘90s who had spent most of the day executing basic trades became a highly compensated financial services advisor who specialized in balancing complex portfolio risk.

Second, the industry created substantial new opportunities for higher skilled employees. Physicists and real rocket scientists entered the industry to build advanced financial instruments using the new technology and data. 

The innovation of the era created a virtuous cycle of higher skilled workers developing more complex products that drove higher salaries. Most important, this cycle created jobs at three times the rate of other industries. According to the Bureau of Labor Statistics, the number of jobs in the U.S. securities industry grew nearly 3% per year from 1990-2013, while average annual job growth across all sectors was 1% per year.

While innovation likely reduced the number of routine task jobs, it fueled a high-skilled job creation machine that ran for decades. Of course, it can be successfully argued that this machine did ultimately run amok but we’ll leave that debate to the political economists. However, the fundamental relationship holds true: Innovation drives demand for more highly skilled, highly paid employees.

TV advertising is at the dawn of its technological and data innovation virtuous cycle. The nascent conversations held today on managing cross-platform campaigns or interpreting multi-touch attribution models speak to the future types of jobs that will become the norm in TV advertising. The jobs will indeed become more complex and analytical.  Many more will be created out of the bed of innovation.  But one central premise will not change. This will remain a relationship-driven industry, even with all of the technology and data innovation on the horizon.

2 comments about "Programmatic TV Is A Job Creator".
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  1. Benny Radjasa from Armonix Digital, Inc., March 13, 2015 at 3:52 p.m.

    Walt what, you are saying will be only true assuming that the amount of money that will be spend on TV ads will be increasing year after year. The size of stock market grew from 1909-2006 not just because of better technologies or better investment vehicle, but I believe that the increase of unlocked capital/wealth pumped in monies into the market at a faster rate than better technology/efficiencies or better investment vehicle could.

    I think if people watch less TV, there will be less money poured into TV ads. The pattern of media consumption is still changing, cord cutters are on the rise. (Source: http://www.mediapost.com/publications/article/244536/new-cable-subscribers-help-balance-increase-in-cor.html). Nielsen reported time spent watching online content rose 38.5% in year-to-year (Source: http://www.mediapost.com/publications/article/245431/updated-big-news-from-small-screen-reports-ooyal.html).

    We will see in a decade when the dust settle, what the fragmentation pattern will be. Unless you have rocking hit show, your chances of recovering lost TV user from other steaming sources is not good.

  2. Ed Papazian from Media Dynamics Inc, March 13, 2015 at 5:11 p.m.

    Even though this is an article from last year, it's rather much to start out by claiming that agencies and TV networks are embracing programmatic buying for TV as all that has happened so far are a few communications/paperwork tests in a market or two plus several single media so-called "programmatic" buys involving the Super Bowl and ESPN. As far as creating more jobs is concerned, Benny is right in pointing out that TV ad spending needs to increase to support more buyers, sellers, computer technicians, researchers, etc. though he need not worry, TV viewing---that part of it involving commercials, at any rate---will probably increase, not decrease over the years. In fact, if Nielsen gets its act together and provides some validation for its ppms, it is likely to discover a substantial amount of "lost viewing" that the networks and some cable channels can, at last, try to "monetize. I also believe that whatever happened to the financial services industry has little to do with TV programming and advertising. Were 90% of TV's ad impressions ever to be handled in true programmatic" fashion---as described by its ardent advocates----there would probably be a lot fewer sales and marketing people working at the sellers and many less time buyers. Of course, someone will have to wine and dine the buyers' "trading desk" computers and/or the techies that serve them so, perhaps, a totally new job junction will be created. I wonder what they'll call it------is Asimov still alive? Maybe he can think up a nifty sounding job title.

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