How Programmatic TV is Moving Towards Prime Time

keith_lorizioBased on all the headlines we’ve seen in recent months, you could be forgiven for thinking that programmatic is already taking the TV industry by storm. And, to be sure, the time will come — probably sooner rather than later — when programmatic becomes a dominant force in television advertising. After all, it’s not hard to imagine a moment when a TV is thought of as just one more screen for streaming your favorite content. When that happens, programmatic will certainly take center stage. But, at the moment, broadcast TV is alive and well, and programmatic TV is still in its infancy.

Let’s take a closer look at where things stand and how programmatic is making inroads into the $70 billion TV ad market.

Where Programmatic TV Falls Short

By now most marketers are familiar with programmatic buying on digital platforms. The programmatic revolution in digital has ultimately been about data and the various ways marketers can use that data to deliver ads to the exact right people. The obvious question about programmatic TV, then, is whether it’s really possible at all, considering that the data and infrastructure of DSPs, exchanges, and real-time bidding don’t yet exist for TV. As Rino Scanzoni, chief investment officer at GroupM, recently put it to AdAge: “What is considered programmatic in digital … is not taking place in the TV world.”

Joanna O’Connell, director of research, AdExchanger Research, sounded a similar note at a recent marketing conference, where she pointed out that, for all the talk about programmatic TV, the ads on TV are still purchased with good old fashioned rate cards. “For those of you that expected me to get up here and say, ‘Programmatic TV is now’ — I just can’t say that because, frankly, it’s not,” O’Connell said. Added O’Connell, “I would say that we are in the crawl phase of the evolution towards programmatic television.”

How Programmatic Is Already Influencing TV

Of course, if TV advertising can’t go fully programmatic just yet, that doesn’t mean that the process hasn’t begun. Programmatic TV is still in its early stages, but significant changes can already be seen taking place.

In its current form, programmatic TV really amounts to making better use of data within TV’s current ad-buying infrastructure so that marketers can do a better job of matching inventory to target audiences. Such targeting may not be “programmatic” in the full sense of the word, but more advanced targeting that takes TV beyond “age” and “gender” is itself a major step forward for a system that has remained unchanged for so long. Going beyond those parameters and identifying a really niche program that might not have been normally considered for a TV schedule and recognizing that a specific audience watches it is a major progression for the television advertising industry.

Though programmatic TV has made a good deal of progress so far, it still has a fair amount of distance to travel. There are certainly options available today for buying ads on a number of cable networks and viewing all of the available inventory, but the trafficking of the ads is still done manually. TV networks also have to approve every ad, making true automation impossible.

Still, if the current ad-buying process isn’t seamless, it incorporates more data than traditional buying on broadcast TV, and it certainly is less cumbersome than traditional buying. Indeed, rather than dismissing programmatic TV as mere hype, it’s time to recognize that important steps are being made. True programmatic TV isn’t a reality just yet, but there’s little doubt it’s on the way.

Keith Lorizio serves as Chief Revenue Officer at Chango, a programmatic advertising company, purpose-built for the marketer. He is a senior level executive in digital advertising with 20 years of experience leading high performing sales teams. Prior to Chango, Keith was most recently Vice President of US Sales and Marketing for the Advertising & Online organization at Microsoft.