• by Karlene Lukovitz , March 4, 2016

How far has programmatic TV come, how far is it going, and how fast?

That seems to depend to a large extent on who’s doing the assessing.

In a new report, Brian Wieser, senior research analyst-advertising for equity research company Pivotal Research Group, occupies a middle ground: While evolutionary change is underway, a rapid or revolutionary shift in practices is highly unlikely.

Wieser — presumably not in any “camp” but the potential investor’s — gives relatively little attention to automation’s role, not even mentioning the word “programmatic” until near the end of his analysis.

Why? He acknowledges that “automation is generally becoming more common in all TV buying efforts,” and that it can be “argued” that some television ad sales programs are “a form of programmatic advertising” — but in a way “defined differently than in Internet media.”

He maintains that if you’re defining programmatic as rolling up aggregated individual impressions across the media employed in a campaign, particularly delivering impressions in near-real time, “conventional linear television does not lend itself well to these notions of programmatic advertising at present.” Reasons: “Networks are generally reluctant (if not unable) to allow ads to run without advanced clearance, and television’s business models and infrastructure are unable (if not unwilling) to supply vast volumes of impression-level sales.”

Or, as he put it in a follow-up interview, “If you’re talking about automation [on the level of] so-called traditional display programmatic, or near push-button automation, that’s a long time off” in linear TV. “It’s a technical possibility that doesn’t exist yet, and it’s a business model choice that won’t likely exist any time soon. But you certainly can’t rule it out.”

Wieser instead focuses on the status and implications of “alternate data-driven” TV sales — using networks’ expanding offerings of data sets other than Nielsen’s age- and gender-based data to target audiences with national television.

One point of his report (downloadable here) is summarizing the “key, linear TV-focused” offerings of the three network group players that he assesses as being the most “publicly aggressive” in releasing alternate products (NBCUniversal, Turner Networks and Viacom Media Networks).

Wieser also offers his takes on the status and broader implications of the traditional versus new approaches.  

A core challenge for advertisers and buyers, he stresses, is that making a wholesale shift to new buying approaches will require the ability to access all inventory — or at least a sufficient volume of inventory — on a truly comparable basis.

“It’s one thing that you can’t do this yet across networks; you also can’t even do it inside a network,” he observes. That undercuts logical bidding and negotiations and means that some inventory “is going to be more expensive than your model says it should be — which is kind of hard to swallow.” In other words, he sums up, the advertiser can end up “just buying a different kind of waste” than in traditional buying. 

If the networks thought that true revolution was in their best interests, they would simply make all of their inventory available through the new approaches, laying out what buyers must do to participate, Wieser adds. “But because there’s still so much demand for broadcast network inventory bought [at premium rates] in the traditional way, with traditional means of audience identification, they’d be foolish to give that up — at least right away,” he asserts. “That said, if someone buying through the new approach has a higher offer, they’ll take it.”

Wieser sees the scenario as being mostly upside for networks that show leadership and help shape the industry’s direction.

“Networks establishing ad products involving alternative data sources efforts will, at minimum, deepen their relationships with advertisers (usually, but not always, in partnership with agencies),” he writes. “Most large advertisers want to learn about the evolution of their most important medium, and the potential for customization towards brand-specific goals is alluring,” so new initiatives “elevate” conversations between sellers and advertisers that might otherwise “be solely about ‘spots and dots.’”

Wieser stresses that Pivotal believes that “the bulk of spending will continue to be targeted on a Nielsen-driven age-gender basis for the foreseeable future.”

For most marketers, “television will still be viewed as a medium that provides ‘air power’ against target audiences and non-targeted influencers alike, which enhances the power of the proverbial ‘ground troops’ of digital advertising and retail marketing,” he writes. In general, use of alternate data-driven approaches “will probably be complementary to existing ones.” Nielsen would even see some upside, including as a key provider of some of the alternative data sets, he adds.