Local Programmatic TV: All of National's Challenges ... And More

With national programmatic television still in the nascent stage, it’s not surprising that significant adoption of local PTV — which shares all of national’s challenges plus some of its own — is also expected to take several years.

A BIA/Kelsey report released this week — its second on this topic this year — forecasts that local PTV will start to take off over the next three years, building momentum along the way. This year, just 1% to 2% of the total spot television market, which BIA/Kelsey estimates at $21.9 billion, is expected to trade programmatically.

“From a local perspective, I believe it will start with addressable delivery to TV stations sometime in 2016, and we’re at least 18 to 24 months away from a full-blown solution,” observed Rob Weisbord, COO of Sinclair Digital Group. “The transformation will begin with national advertisers prior to reaching the local level.”

The reports’ authors, BIA/Kelsey managing director Rick Ducey and Mitch Oscar, director of programmatic strategy at U.S. International Media, posed key questions to a panel of experts from advertising agencies, TV station groups, data providers and technology platforms.



These pros see three main complicating factors that need to be tackled to enable widespread adoption of local PTV: the need for integration of TV stations and platforms; different workflow software; and lack of measurement reportage other than age and gender. 

But that’s not all. They also describe four “impediments”: lack of transparency; potential for sales channel conflicts; concerns about reach and frequency unduplicated across channels; and data and universe standardized definitions.

The industry is not only grappling with multiple audience metrics methodologies, but with how to incorporate audience data into numerous buying and selling platforms, Ducey noted to Audience Buying Insider. “Some buyers are using 30 or more systems and software applications, and there are multiple research vendors and data suppliers as well, of course. Multiply all of that complexity by 210 DMAs, with multiple local TV stations, across the country.”

Speaking with ABI, Barry Lowenthal, president of The Media Kitchen, stressed that programmatic buys, whether local or national, are far from truly automated at this stage.

“Often the buying process is, ‘Let’s pick up the phone, request a proposal and do an insertion order,’” he said. “It still takes a lot of people to identify the entire available inventory at a given moment, and roll up a buy.Once the whole process is automated, and we can buy inventory easily and quickly, using first- and third-party data to inform our decisions, more money will flow to local and national platforms.”

He also notes the lack of upfront transparency in national buys of aggregated local inventory. “In a lot of cases, there’s still no transparency on the geographies before you place the buy,” he says.

Meanwhile, as Ducey points out, local buyers have only limited, after-the-fact information about the programs, dates and times that went into achieving the purchased impressions, and the reach and frequency metrics. In addition, the various players often define audience segments differently.

Asked about experiences in buying local TV programmatically, Lowenthal reports that The Media Kitchen buys local for campaigns for retailers, telecoms and financial services companies, among others.

“Where we have to buy zip codes, we’ll go to the MSOs and buy spot cable,” he says. “In some cases we’re buying addressable TV, where we’re buying by households, so we’re splitting different creative across an MSO. 

“We’ve also bought programmatic television nationally where we couldn’t afford to go to a cable supplier and buy the networks across the country, but we could afford to go to one of the national programmatic suppliers and buy the audiences in whatever markets we were able to find them,” Lowenthal says. “For instance, we bought a female, fashion-forward audience nationally using programmatic, through aggregation of cable inventory.”

Although local cable had the highest CPM, it was also much more targeted, he adds. “When we were buying it nationally, it was more efficient than a national cable buy, and it was also more targeted. We were able to buy the networks, but not at the program level, enabling us to buy sufficiently to meet the needs of this client. In other words, we were able to buy certain verticals with some specific networks.”

The new BIA/Kelsey report includes summaries of the local PTV initiatives and partnerships underway at programmatic platforms, station groups and other players.

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