The option of buying TV ads programmatically has yet to gain real traction and is set to represent a modest 3 percent of ad spending this year.
But next year the methodology is expected to ramp up to 6 percent of ad spending, jumping 105 percent to rake in some $4.43 billion. Analysts attribute the increase to easier purchasing transactions and better targeting capacity; after all, it’s able to hone in and engage with key audiences in real time, on a massive scale.
“We expect national and local players to take a conservative approach at releasing inventories programmatically, amid fears they could cannibalize their inventory,” says eMarketer’s Martín Utreras. “At the same time, they’re working to become more adept at leveraging data for both ROI measurement and targeting.”
Among growing trends in programmatic TV:
- Led by Google, single media plans incorporating both digital and TV ads are becoming more common. However, some point to resistance to Google buys from those concerned it may dominate the TV field. Other early experimenters besides Google include Adobe, Simulmedia and Videology.
- Addressable TV, the method of buying access to key audiences instead of focusing on key TV programs, is expected to become more widely available.
- New targeting tools can identify who’s watching digital TV and send relevant ads in real time.
- Engagement-based buying allows advertisers to effectively track responses to ads via smartphones and other devices.
- Data-driven ads are being applied to local broadcasts of live sports competitions and other events. For example, sports bars and restaurants can advertise timely food and beverage deals for those interested in watching an important game on their big screens (or just meeting at the business afterward).
- Cable operators including Sky, AT&T and Charter are offering their own OTT streaming services that deliver live and on-demand TV content via the internet.
- Several major broadcasters in Europe are making their connected TV inventory available for programmatic buying.
- Companies making significant investments include AOL, which spent about $500 million in programmatic digital TV ads last year.
- Major players recently securing programmatic TV funding include independent ad platform AdRoll ($89 million in funding to date); WideOrbit ($35 million in funding since its founding in 2015) and Samba TV ($30 million in Series B financing earlier this year).
“The innovation being displayed in local TV and programmatic is becoming more widespread,” notes BIA/Kelsey’s Rick Ducey. “These developments are being supported by new alliances and partnerships, mergers and acquisitions, and sophisticated product road maps. When you step back and examine the possibilities, any movement of local TV toward programmatic buying and selling will significantly impact the amount of spending and could win more spending that might have gone to digital.”