• by Karlene Lukovitz  @KLmarketdaily, June 24, 2016

What are the key factors driving the speed and extent of adoption of programmatic television? What factors could impede adoption?

Frank Foster, a consultant who most recently served as SVP, general manager for TiVo Research and Analytics, offered some thoughts in an interview with Audience Buying Insider.

The meaning or definition of “programmatic” television can vary depending on the user and the context. How do you define it? And what are the primary attractions from the buy side?
Yes, programmatic tends to mean different things to different organizations. Basically, programmatic is a secondary marketplace, which typically allows buyers to target audiences rather than context. A buyer may target adults 25 to 54 who are in the market for insurance, as opposed to buying a spot in a nationally televised college football game.

Additionally, programmatic allows media sellers to present inventory in a different way — highlighting the fact that an early or late fringe block of programming reaches older adults in the market for reverse mortgages, for instance. And it gives agencies and advertisers more options for evaluating opportunities for targeting audiences. 

Programmatic leverages technology and automation to streamline the process of pulling together enhanced audience data, identifying inventory and tying the two together.

To succeed and grow, programmatic platforms must simplify the planning, buying and posting process to be more in line with traditional buys. If programmatic platforms required 10 times the work to reach the same audience as a traditional sales channel, agencies would resist using them.

Programmatic also promises the ability to reach the same audience that views, for example, a prime-time drama, through other networks in other dayparts, at an economical price. If the advertiser places less importance on context and time of day, the cost savings offered through programmatic may be intriguing.  

What are the benefits for media sellers?
From the sell side, programmatic platforms can provide a way to sell lower-demand inventory without sacrificing price and jeopardizing a network’s premium content perception within the primary marketplace.

That’s because media buyers using the platforms are buying based on audience targeting, not context — they usually don’t know which programs or networks their spots ran on until after the fact. So programmatic platforms offer sellers the ability to present inventory in a way that offers both obfuscation and minimal channel conflict in their primary marketplace.

In addition, inventory that can’t command strong pricing in the context-driven primary market can sometimes actually command more in the data-driven programmatic environment. Hypothetically, for instance, old television shows running in late-night might start to look pretty attractive to buyers if they’re delivering significant viewership among the hard-to-reach 18-to-24 audience.

Can the programmatic approach work for all advertisers?
Unlike digital platforms, television is struggling with evaluating performance beyond the traditional Nielsen ratings. Performance-based metrics are still uncommon, although a few players are offering them.

That’s one reason that some advertisers don’t necessarily see the value in the programmatic approach for television. Also, for some brands or marketers, daypart or program content factors can trump more granular audience targeting in terms of the efficiency of influencing — not just reaching — their core audiences.

Suppose a retailer with a target market of women 25 to 54 has research indicating that their decisions about where and when to shop during a given day are made before 9 a.m. In that case, a targeted impression delivered during “Good Morning America” or “The Today Show” is much more valuable than an impression delivered to the same target during “The Daily Show.”

So what are the keys to accelerating broad adoption of programmatic television buying? Are there factors that could slow the momentum, or even make programmatic peter out over time?
Quality inventory, quality data, transparency, operational efficiency and metrics — the same variables that drove adoption of digital programmatic platforms — will drive adoption in television. 

If even one of these factors is missing or inadequate, it will undermine programmatic TV’s growth, perhaps seriously.

There is a balancing act. Buyers will obviously require sufficient transparency and value. But if sellers feel that transparency reaches the point where buyers have too much advantage, they won’t make their inventory available.

Bottom line, it’s got to work for both buyers and sellers.