• by Tobi Elkin  @tobielkin, February 6, 2017

Real-Time Daily spoke to Tim Webster, chief strategy officer of The Exchange Lab, a programmatic agency whose proprietary technology dubbed “Proteus” unifies multiple demand-side platforms (DSPs) into one platform.

RTD asked Webster about what lies ahead for programmatic TV, programmatic's relationship to artificial intelligence (AI), and the potential for dynamic, real-time creative, among other things.

Real-Time Daily:With programmatic TV (PTV) ad spending in the U.S. forecast to grow to 6% of total TV ad spending by 2018, how likely is it that PTV and radio will come to fruition this year? 

Tim Webster: Smart boxes and smart TVs enable data to be collected easily from households, which means if you’re an advertiser you don’t have to evaluate a radio or TV program individually, you can pick and choose your audience based on real interests.

By 2019, it’s estimated that more than 50% of households will have a smart TV in the U.S., U.K., France, Germany, and Japan, and the momentum will pick up this year. It’s the same for radio where more stations are going programmatic. Through data, advertisers have the chance to engage one-to-one with their customers.

Traditional TV is still incredibly manual when it comes to the distribution of advertising, so the efficiencies of programmatic from a transactional point of view should be a welcome solution, [though] this is a little further off.

What’s really interesting is the ability to offer a single buying point across TV, desktop, and mobile. This will allow marketers to get a holistic view of all channels when it comes to their media buying, which in turn will enable them to be more strategic and ensure cross-channel communication with their customers.

RTD:How is this going to happen?

Webster: It’s already beginning to happen in some areas of the TV industry, such as over-the-top services (companies delivering TV or film over the Internet). Some media owners are already set up to use data and are executing programmatic ad campaigns for advertisers.

National TV stations, on the other hand, still have a way to go to be able to advertise programmatically. There isn’t enough data available yet to gain the type of efficiencies seen in programmatic through other channels.

As we have seen with programmatic video, to take advantage of the real efficiencies, more [premium] inventory needs to become available. The demand is there from advertisers. According to The Trade Desk, 48.0% of advertisers and agencies plan to use it within the next two years.

Radio currently provides more opportunities for scale than programmatic TV as there are no set-top boxes for users to sign into. If you’re a radio station looking to execute advertising, all you need is a device ID or cookie.

RTD: How do OTT services enable this process?

Webster: OTT services offer an easy way for viewers to access TV content via the Internet; as with online publishers, interests, web history, and log-in information are all used to create a picture of the user at the other end. That means relevant messages can be served to the user through programmatic means.

RTD:What are you seeing now in the market?

Webster: For programmatic TV, Sky’s AdSmart is the holy grail because it offers an integrated, end-to-end solution. Sky owns the box, the data, the delivery system, and account details, as well as being the largest provider in the U.K. for paid content. Sky’s able to take the demographic data from each box in a household and serve different ads to each individual box.

Many of Sky’s customers use their broadband, phone line, and TV. This means that Sky has all the information from a user’s internet service provider on which sites they’ve visited, as well as billing and TV viewing history mixed with all sorts of information from the owner’s set-top box – and any other Sky set-top box in the house. There are others developing this technology, including Facebook. It’s creating a solution through its Facebook Audience Network that uses video apps on set-top boxes such as Apple TV and Roku, targeting users with ads based on their interests.

RTD:How does AI tie into programmatic?

Webster: To be considered AI, a machine needs to exhibit intelligent behavior. Programmatic clearly isn’t there yet.

Some methods are more advanced than others. For example, there are "dumb" bidders with no algorithm at all, and advanced bidders, which have algorithms that look at historical data to make buying decisions.

While algorithms learn, AI can do it faster. This means AI will succeed and fail faster, increasing the speed of learning. While AI is unlikely to replace the work of humans in advertising in the near future, deep-learning and connected-learning technologies will begin to replace "traditional" programmatic methodologies and algorithms.

AI will help programmatic campaigns succeed faster, increasing performance so campaign optimizations can be made far more quickly.

RTD:Programmatic creative is a key area for growth and specifically dynamic creative or real-time creative. What is the promise and where is it falling short?

Webster: There has been a clear lack of synergy to date between programmatic and creative. The promise of programmatic has always been to deliver the right ad, to the right user, at the right time but unfortunately creative is still often an after-thought. The exception is where a dynamic creative optimization engine is used to deliver customized ads to a user. More often than not, this is limited to product information based on browsing history and not driven by other data known about the audience.

More thought needs to be given to the ads created and the environment they’re going to be delivered in. A creative story that is told in a 30- second TV ad isn’t going to translate to a video ad with an average run time of five to 10 seconds.

RTD:How can this become a more seamless scenario?

Webster: Creative and execution discussions need to happen much earlier in the campaign lifecycle, bringing data and audience into the conversation earlier. All agencies and partners need to work on a strategy together. This is still something that doesn’t happen enough.