This prediction at first appears to be optimistic. The prices that buyers are willing to pay for TV audiences are well-established, based on more than 75 years of trial, success and failure. Time spent with TV is declining. Most of TV’s current revenue still derives from sales of ads in formats established in the 1940s.
It’s increasingly apparent that TV will need to embrace innovations born from digital ad tech to find its next $30 billion. With measurement standards in flux and pressure on media companies to stretch ad campaigns across media channels, there’s never been a time so ripe for TV’s advertising leaders to embrace innovation.
Where will this growth come from? If we look at the rocket-like trajectory of the digital media industry, it’s obvious what has created more value: infusing campaigns with data to enhance their efficiency.
There are strong indications in the run-up to this year’s network upfronts that digital-fueled ad tech is starting to take a starring role in TV advertising. On the selling side, NBCUniversal, Google and a triumvirate of Turner, Viacom and Fox have announced a renewed focus on data-driven TV advertising innovation.
On the buy side, anecdotal evidence is also surfacing that ad buyers are eating up the new style. NBCU SVP of Advanced Advertising Products Denise Colella said in a recent podcast that its Audience Targeting Platform (ATP) has renewal rates upward of 70%, with many returning buyers doubling and tripling their spending.
For good reason, the TV industry wants to avoid the sins of programmatic digital. Nobody wants to be become ensnarled in controversies over fraudulent placements or mysterious middlemen ad networks taking vigs for nebulous services.
Players in the TV ecosystem are starting to cautiously place their bets. As they do, so it’s evident what they’re looking for from advanced advertising platforms:
1) Automation: Reducing transactional friction should be the technology’s number one goal, period, by eliminating manual steps and cutting out taxes paid to middlemen. A system where inventory is procured with phone calls and emails isn’t really delivering the benefits of automation.
that generates value: The platform must offer tools and capabilities that make advertising more valuable. There’s no incentive to move to a new marketplace that simply replicates
today’s non-automated transactional processes.
3) Impartiality: Integrity and fairness must be paramount in the marketplace’s design, including ensuring that buyers and sellers can protect their first-party data behind firewalls.
4) Transparency: Buyers must be able to select exactly where and when their spots will run. Buyers are wary of packages of “TV Sausage” that dilute CPMs and ad effectiveness with undesirable blends of premium and less desirable inventory. On the other side of the fence, sellers have the right to know who they’re selling to so they can protect their pricing and avoid channel conflicts.
By standing relatively pat while digital went through the growth pains of its early years, TV had an opportunity to take only the best from digital media for its next stage of growth.
So what exactly is the best of digital media? How will we know it when we see it in a TV ad -ech solution? Two years into TV’s programmatic revolution, we’re starting to see the answer.