Writing in Cynopsis Media, Derek Mattsson, president of placemedia, argues that demand-side platforms (DSPs) are beginning to come to the table with real budgets for programmatic TV (PTV). He expects the PTV marketplace to double in 2016 to represent at least 1% of the total $70 billion TV ad marketplace, and says 2017 will see a similar growth trajectory.
And Mattsson makes the point: “It may sound like $700 million is small potatoes -- but that’s up from zero in the last five years. And if past is prologue, this will double again in a very short time. It’s a bit like Moore’s Law.”
Mattsson’s point is well-taken, especially if you take into account the proposed merger of AT&T and Time Warner. Assuming the $85 billion-dollar deal gets through all the regulatory hurdles and it doesn’t flame out in a clash of culture wars, silos, and opposing visions, these two players combined are enough to open the floodgates for PTV and addressable TV, for that matter.
According to Mattsson’s definition of PTV, “it’s the process of targeting highly indexed audiences via an automated transactional platform, enabling buyers, efficiently, to find impressions they can’t access with a traditional TV buy. The technology streamlines and rationalizes the process of buying and selling television inventory.” This sounds like a reasonable description to RTBlog.
But one of his major points is that this process needs demand -- that in order for this to work, there must be a demand for the inventory.
Back to the point about DSPs: Mattsson argues that DSPs’ average order size has increased 50% to 75% in recent months vs. the same period last year. Furthermore, he states: “the automation subset of ‘programmatic’ is rapidly developing on the ‘front end’ -- the demand side -- of the linear TV ecosystem.”
If all this is true, it’s another sign that there just may be a market for PTV and that advertisers are dipping their toes in more. He cites an example of one agency moving a pharmaceutical client from the spot TV market into programmatic TV. This, he said, is a follow-up to advertisers’ willingness to buy programmatic video. Advertisers and agencies are buying PTV through DSPs that are accessing aggregated inventory from supply-side platforms (SSPs).
The goal of the march toward PTV is to help marketers get more bang for the buck and to spend their budget more efficiently, while also gaining access to advanced analytics on their audiences. In addition, PTV, hopefully will help TV companies manage and optimize their inventory more efficiently.
It’s a wait and see as to whether the AT&T/Time Warner deal will help push and promote the growth of PTV. Certainly, the work each company has done on its own over the last year or more has helped.