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Advertisers Tune In to Programmatic TV

Programmatic TV and video must be on same wavelength

March 10, 2015

Programmatic advertising burst on the scene several years ago. Initially popular as a way to get the best rates on banner advertising, programmatic eventually spread to mobile, social and video. Now, the programmatic world is buzzing about something else: TV. Though usage is low, interest is high. In a December 2014 study by Cowen and Company, only 15% of US senior ad buyers reported using programmatic for TV ads. While just under one-fifth of respondents intended to start using programmatic for traditional TV ads in 2015, more than two-thirds were open to using it at some point.

Percent of TV Ad Spending that US Ad Buyers and Sellers Conduct Programmatically, Current vs. Future, Feb 2015 (% of respondents)

These figures are higher than findings from an AOL Platforms study conducted back in June 2014, when just 8% of US advertising execs said they used TV for programmatic buying, and 12% intended to up spending in the next six months.

Increased interest is in line with spending trends found in February 2015 polling by Digiday. While more than six in 10 US ad buyers and sellers said that none of their TV spending was currently done programmatically, just over one-fifth of respondents expected this to be the case in 12 months. Digiday reported that the current average—between 3.7% and 6.0% of TV budgets—would rise to between 8.0% and 12.6% over the year, meaning programmatic TV dollars would double by next year.

It’s not enough to just slap a programmatic TV plan together—integrating such efforts with video is critical. For one, this allows buyers and sellers to leverage the already-popular channel: Among Digiday respondents, 67.1% purchased video programmatically, vs. 23.5% who said the same about TV. Cowen also found high programmatic video usage compared with TV. Here, US senior ad buyers reported allocating 29% of programmatic advertising to online (23%) and mobile (6%) video, vs. 8% for linear or traditional TV.

Importance of Buying Programmatic TV Inventory Alongside Digital Video Inventory According to US Ad Buyers and Sellers, Feb 2015 (% of respondents)

One-third of Digiday respondents said it was very important to purchase programmatic TV inventory alongside digital video—the most popular response—and nearly 50% said this was important or somewhat important.

Beyond video’s popularity, there’s a bigger reason to coordinate programmatic TV and video buys: audience data and targeting. If programmatic advertisers are investing across channels, they’d be wise to integrate campaigns to link and leverage data, according to Digiday. This will help them form a more effective multichannel strategy and target the right audience at the right time on the right screens.

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