Programmatic TV: Don’t Sit Back and Watch This Advertising Opportunity Pass You By
Last night while you were watching your favorite television show and that extremely relevant advertisement popped up was no coincidence. In fact, it’s just an occurrence that’s starting to pop up more and more across MVPDs, (multichannel video programming distributors,) and is all thanks to programmatic marketing techniques. Spending on programmatic television, or the data-driven mode of buying and supplying targeted TV advertisements, continues to grow and is expected to reach a record $4.7 billion in 2020. With it, advertisers spend less, increase accuracy, and enhance data results, thereby influencing digital advertisers to jump on this 2019 trend as soon as possible. These rewards continue to become even more advanced and worthwhile, making the future of television a promising one.
Programmatic TV is the act of buying TV spots or programs with viewers that match criteria set in place by the advertiser. It’s on the rise this year, and its newer subset, addressable TV, follows in suit with bringing about promising results. Unlike programmatic, addressable TV purchases audiences instead of programs and refrains from targeting at the individual level. Instead, matches are made on a household level and bid on in real-time to deliver targeted ads directly to applicable households. US addressable spend is expected to reach $3 billion this year as advertisers become more cognizant of the trend’s rewards. Targeting precision, means of measuring results, and the optimization of revenue are just a few of many to be sought.
Before delving into the realm of programmatic TV, it is important for marketers to understand how it works and how it continues to evolve. It all begins with advertisers using broadcaster’s STBs, (set-top boxes,) to identify specific subsets of consumers. From there, ads are sent via STBs to applicable audiences, (whether through purchased programs or households,) and data is sent back to MVPDs to analyze. This data is based on exposure and makes note of viewing times, viewing channels, and customer account numbers. In 2019, ad tech companies are hoping to standardize this household data as it derives from various live and on-demand programmings. The hope for standardization continues with MVPDs working together to create central organizations for selling addressable inventory. And the pressure is on as more than 70 million households in the US have addressable TV capabilities.
Adoption into programmatic TV means the growth of even more and more targeted videos during the ad breaks of early-morning news programs and late-night movies. This year, as illustrated in our 10 Top 2019 Programmatic Media Buying Trends infographic, programmatic TV ad spending will have a 236% increase from last year. Targeting consumers and reaching them across all platforms is necessary to influence action. Television is no exception as these new developments provide companies with ample opportunities to reach all the right households at all the right times.
The Time to Invest is Now
With a projected $3.8 billion spend on programmatic TV ads this year, there is great opportunity for advertisers to hone in on this trend and master techniques to increase their advertising ROI. US consumers spend nearly six hours a day watching video, television taking a huge chunk of this time. So, as advertisers, mastering the targeting techniques, measurements and optimization of programmatic TV is essential in 2019 and years to come.