Commentary

NBCU's Move Into Programmatic Positive Sign -- But More Work Still Necessary

When it comes to programmatic advertising, TV is the new kid on the block. NBCU, for instance, only recently announced it will make its ad slots available for programmatic buying. This is great news for the industry, as it further validates that the automation of media buying is the way forward for advertising as a whole—that it makes sense not only for standard display units, but across all connected platforms and devices.

However, while programmatic TV sounds great in theory, we must be aware of several pitfalls that might inhibit quick adoption.

The Kinks

It seems as if everyone is currently trying to find the holy grail to make programmatic available at all levels of a publisher’s ad server—whether that “publisher” is a TV station, a desktop website or a mobile app.

While programmatic has traditionally been situated at the bottom of a publisher’s priority chain in terms of selling, we are now witnessing a collective, yet dispersed effort to make sure programmatic is competing against all other media buying channels. For the moment, we see a tension between Google and all other programmatic exchanges that boils down to the fact that, as an industry, we still haven’t agreed on a one-size-fits-all solution for programmatic prioritization. First look, header bidding—anyone?

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Moreover, we are still in the process of figuring out how to fully utilize programmatic direct—the creation of private programmatic marketplaces that give publishers more control than the open exchanges—to maximize returns for both the buy- and sell-side.

At the moment, most private auctions, or so-called “preferred deals,” aren’t reviewed properly, buyers have differing interests (CPM rates, data), and publishers haven’t yet understood which criteria to use when evaluating participants in deals. No doubt programmatic direct can be considered the single biggest accelerator of programmatic in the last several years, but we’re still busy finding more transparent and structured ways to reap the potential benefits of sharing data and granting preferred rates.

Programmatic TV also faces the problem of scalability, the same issue that plagued then-new programmatic channels like mobile apps in years past. The growth of mobile app advertising has long been inhibited by a reluctance on the programmatic buy side to bid in a cookie-free environment, and app users can only be targeted properly if there is some kind of opportunity for buyers to match them with cookies.

Thus, the big walled gardens like Google, Facebook, and Twitter—and newly developed matching companies like Drawbridge and Tapad—have invested tremendous resources to match Android IDs and IDFAs with cookies. Only through these advancements have buyers slowly gained trust in buying app inventory. We’re still not nearly where we could be, given the potential of the app channel.

A Long Road Ahead

Programmatic TV is doomed to face many of the same challenges in the early days. We as an industry have to find ways to target the right users—and, at best, to match them against what we already know through cookies and other data sources, so that we can provide more relevant and personalized advertising, regardless of what media the user is consuming.

However, as it stands, the industry is too busy figuring out how to further promote programmatic within the ad server to realize the full benefits of programmatic direct. Until we can resolve these issues, it will be hard to get programmatic TV right.

1 comment about "NBCU's Move Into Programmatic Positive Sign -- But More Work Still Necessary".
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  1. Ed Papazian from Media Dynamics Inc, March 6, 2016 at 5:58 p.m.

    It is extremely unlikely that NBC is going to offer any of its "premium" content to programmatic buyers---except for last minute distress sales caused by sudden cancellations--about 1-1.5% of its GRPs, at best. Most of the spots made available will, no doubt, be in very low rated early AM, weekend and very late, late night time periods. So it's a little premature to count NBC as "in the bag" where programmatic buying and selling is concerned. This is, more likely, a clever sales ploy whereby the network offers time at much higher than its usual give-away rates, hoping that the computers, having no alternatives to consider, will make some purchases and improve the monetization for the programs involved. NBC's cable channel, Bravo, did the same thing a while ago and now it and other NBC cable channels are joining their parent network hoping to cash in.

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