The programmatic TV (PTV) ecosystem is growing, but a 4C white paper on the subject points to a number of barriers that are inhibiting its wholesale adoption -- particularly a fear that PTV will rip control away from suppliers and force CPMs down.
The PTV market is expected to grow from $706 million in 2016 to $2.160 billion -- or 3% of the TV market -- in 2017 and up to $4.428 billion -- or 6% of the market -- in 2018, according to eMarketer. Growth is there, but barriers are holding PTV back.
4C spoke with brands, media buyers, planners and sellers, and narrowed down the difficulties in adopting PTV to four main issues: apprehension from career TV professionals, confusion about what PTV actually is, a lack of infrastructure needed to run PTV -- and perhaps most important, an apprehension from suppliers that the adoption of PTV would significantly lower CPMs.
“Programmatic TV is definitely a more efficient way of buying, especially if the whole process becomes automated. However, it is still in its infancy, as both buyer and seller behaviors need to be changed. In an industry like TV that has had the same processes in place for a very long time, that can require a few years,” stated Brett Adamczyk, vice president of business development and strategy at Videa.
The white paper addressed other interesting points, asking respondents about the strongest benefits PTV can bring the industry. Roughly 58% of respondents say that PTV’s biggest advantage is the ability to target audiences more precisely, 13.5% found lower CPMs as the greatest benefit, and 10.7% saw the most benefit in the automation of the transaction process.
Another question was which metrics were best for measuring PTV's effectiveness. The largest group -- 19.7% -- of marketers said that brand lift is the best way to measure the success of PTV, 17.7% pointed to increased purchase intent as the best metric, another 17.7% chose better media efficiency, and 17.2% said they would look at direct-response metrics first.