• by Karlene Lukovitz  @KLmarketdaily, September 9, 2016

When it comes to hurdles on the way to broad implementation of programmatic TV, lack of sufficient infrastructure and national inventory providers’ concerns about pricing and profitability (and resulting limited premium inventory) lead the short list.

That’s underscored by a new PTV-focused whitepaper from 4C that synthesizes viewpoints and insights gathered, mostly informally, from more than 100 brand marketers, media buyers and planners, and inventory suppliers/sellers in recent months, during development of a new 4C platform.

Unsurprisingly, the report’s thrust is that while the results of advertiser tests seem encouraging even amid PTV’s currently limited automation and inventory, its real potential will take years to realize.

That doesn’t necessarily mean that transactions — for now, mostly buys of local inventory on open marketplaces, and premium inventory on private marketplaces — won’t pick up in the shorter term, at least in 4C’s view. The paper, for instance, cites a WideOrbit survey that found 20% of advertisers planning to spend more than 20% of their TV budgets “programmatically” next year, versus 6% this year as one sign that marketplace adoption “may not take as long as many think.”

“At the end of the day, changing the way a multi-billion dollar industry operates is never easy, but the industry’s macro-economic factors make it almost inevitable,” argues the paper. “Already there is a move to ‘soft’ PTV [meaning partially, as opposed to fully, automated TV buying processes] and the technologies and relationships are now being put in place to ensure that a move to ‘hard’ PTV can be a success.”

“As more advertisers and networks see the inevitability, they’re starting to change their models and thinking, to position themselves” for the changing environment, added 4C’s VP product marketing, Josh Dreller, speaking with Audience Buying Insider. He points to some of the leading networks moves to enable use of enhanced data within their own footprints. 

Human Reactions To Change
While the debate over the speed and scale of PTV’s adoption is ongoing, some of the input gathered by 4C is interesting because of what it says about how human reactions to change can play a part in the speed and course of technological capabilities’ evolution. 

Along with infrastructure and inventory limitations, the report identifies “apprehension” and “confusion about PTV” as the hurdles most cited by players in the industry.

Many brand marketers see potentially revolutionary benefits in increasing efficiency and effectiveness by targeting audiences through behavioral data rather than just age and gender, confirms Dreller. Some agency executives are urging their organizations to establish expertise in the PTV space to position themselves for competitive advantage in the years ahead, and some television executives see the potential for positives in their own businesses (including the possibility of actually realizing higher CPMs through segmentation), even as they take cautious, measured approaches to how they participate, he says.

“A lot of people are going to look at PTV and see a lot of opportunity — there are going to be second movers, third movers, people who aren’t even involved in TV right now who are going to [try to introduce] changes in methods and new ways of thinking” as PTV incubates, Dreller says. “Hopefully, that competitiveness will help drive effectiveness, so that the advertiser who’s paying for all of this wins, by realizing enhanced value.”  

On the other hand, many career television and agency professionals are understandably concerned that their roles may become irrelevant if business models and practices are disrupted, and many marketers know little about PTV and aren’t currently interested in getting involved with it, point out Dreller and the report.

Yet, if there was one insight that provided an “a-ha” moment from 4C’s perspective, Dreller observes, it was that most TV marketers, buyers and planners in the rank and file — “the ones really inside the bubble” — see PTV “as an evolution and advance of television rather than a revolutionary new channel.” In contrast to social media, which was seen as a new channel that required all-new models and practices, many on the front lines think that PTV will “just make [television] better and more flexible, with more opportunity to leverage data,” he says.

By and large, those who do daily media planning and buying  “aren’t knocking down the doors, saying, ‘Where’s my programmatic television?’” Dreller notes. “Their attitude is sort of, ‘OK, when it’s here, just let me know.’”