Commentary
The Next Step For Local TV Advertising Is Automation (Programmatic)
- by Philip Rosenstein , Staff Writer, May 19, 2017
As advertising dollars continue to pour into digital channels, the television industry is in need of revamping of how it sells ads. According to eMarketer, digital ad spend in the United States will surpass TV ad spend for the first time ever in 2017. So the industry will need to find a way to compete for those dollars again.
“The television industry -- which hasn’t altered the way it buys or sells advertising over the last several decades -- is on the threshold of dramatic change,” claims Videa, a sell-side platform built for local TV stations and their station groups, in the recently released whitepaper, "How Automation and Data is Revolutionizing Local TV Ad Buying."
advertisement
advertisement
While the TV industry as a whole has moved to embrace automation, particularly in the form of targeting and reporting, local stations lag behind in fully taking advantage of these capabilities.
A number of barriers remain to a full adoption of a programmatic, or automated, approach to linear TV buying, as noted in a 4C white paper released last year.
The often manual process of looking up ratings on Nielsen or comScore, and mistakes caused by human error when placing an ad at the wrong time or on the wrong show, are strong examples of why local TV ad buying and selling can and should take advantage of automation.
So, what should TV ad sales teams look for in an automated (programmatic) platform?
According to Videa, there are a few crucial capabilities sellers should focus on:
-- Ensure that manual processes are mostly, if not completely, automated.
-- Stations or agencies should be able to be able to completely control their pricing, and provide transparency for media buyers and sellers.
-- Unlike initial programmatic endeavors online, a station’s full inventory should be incorporated into the platform, rather than just remnant spots.
-- If possible, integrate with ad tracking and demand-side platforms.
-- Seamlessly connect to analytics to help sales teams and reps negotiate with accurate data.
Legacy media, as we’ve seen across industries, need serious convincing to move away from tried and true business practices.
The evidence in favor of automating TV ad sales is, however, unequivocal, with little doubt that automated processes tend toward maximizing return on investment. According to Videa, it's likely just a matter of time before we see wholesale adoption of automatic processes across the local TV landscape.
While I doubt that we will see all of TV go "programmatic" in the digital fashion for quite some time---if ever, the greatest potential, at present, is in local or "spot"TV. And, unless things have changed since I last talked with them, Videa has designed a system that mimicks the real world buying and selling process in many key respects. While it is appropriate that most or, perhaps, all but extremely premium GRP inventory--like local sports presentations----be included, spot TV is different from Network in that most buys are not telecast-specific. Therefore, it is possible for a seller to include various local news and syndicated show avails on a program and individul week basis, with the actual commercial placements dealt with later, usually via "fair rotations". Also, it is vital that the seller and buyer have the option to resubmit their avail packages and pricing a number of times during the negotiating process, so the buyer can guide the sellers into refining their offers in the light of the competitive situation. That way the system is fair to both sides. Is this a likely scenario for national TV? Frankly, I doubt it---especially with the upfront and "corporate" buying systems locked firmly in place. There is no upfront for spot.
Thanks Ed, for chiming in, and you’re correct. The Videa platform was built to accommodate (and improve) the current real-world workflow of buying and selling spot TV. Our goal is to simplify the way the industry buys and sells local TV advertising, making it easier to do business,without driving prices down via a less desirable bidding model. We’re also keenly aware that this is not software replacing people. Relationships and are important and allowing for negotiation is certainly a piece of the puzzle. As you know all too well – it’s part art and part science!