It's time to redefine programmatic TV

23 Jan 2015  |  Dominic Finney 
It's time to redefine programmatic TV

Programmatic TV requires new definitions for a brand new medium, says Dominic Finney, co-founder of FaR Partners.

Throughout 2014, programmatic TV has been taken ever more seriously by the media industry and is now viewed as a genuine, if somewhat nascent, contender for highly competitive TV budgets.

Currently we know that various broadcasters such as Channel 4, Sky, Virgin Media and many more in the UK - plus a host more subscription TV channels in the US, France and Australia - are trialling this new method of trading TV ad space.

The discussions taking place on the subject are wide-ranging, and at a roundtable discussion held in conjunction with Propeller PR we spoke to various industry heavyweights to canvass opinion on what the programmatic TV market would look like in the not-too-distant future.

We asked the group - made up of broadcasters, media agencies and ad exchanges - to give us their thoughts on what the main challenges were and how they think a shift towards a more automated approach will happen.

It became evident that what we define as programmatic TV won't be the same as online and all agreed that by educating the market and establishing the right definitions and structure there is a real opportunity to develop a programmatic marketplace.

There is still work to be done to get the TV industry ready for a programmatic marketplace in terms of the technology's infrastructure."

However, there is still work to be done to get the TV industry ready for a programmatic marketplace in terms of the technology's infrastructure, the way it is traded, and the way programmatic is currently regulated in relation to the existing standards that TV is held to.

BBC Worldwide's Tom Bowman believes that "programmatic as a catch-all term can be misleading". Definitions of programmatic TV need to be clarified and standardised, since the term could be used to describe many variants including mobile TV, video-on-demand, satellite and broadcast.

This clarification is necessary due to the fact that the differences between what programmatic looks like online and what it could look like on TV are pronounced. The technical standards that TV is built on are also fundamentally different from online which is an IP and cookie-rich environment.

Lastly, TV is traded on an upfront model with 'audience share' being the currency, which is markedly different from the way online ad space can be traded in real-time against individual profiles.

TV will most likely still need to work on an upfront buying model and to use automation to power the way in which ads are delivered to set-top boxes and catch-up channels - rather than trading the slots via an auction-based real-time bidding (RTB) model which is prevalent online.

The view amongst senior industry players is that programmatic TV will best be developed in stages. As some stages can be addressed much more immediately and by addressing these stages in the right order each stage will provide the key learnings and market maturity to enable the full development of a programmatic TV marketplace.

The core stages are seen as automated buying, improved targeting and biddable media. Automated buying is already happening in the market today, with even spot buying now becoming a highly automated process.

As Jamie West from Sky points out: "Through Sky, advertisers can already effectively, approve, buy and serve their entire inventory through an automated system whether that be VoD or Linear. In terms of targeting, this can be achieved in Linear TV through Sky AdSmart that allows you to target 7 million households against profiles as diverse as affluence, household composition and life-stage. In terms of VoD we can offer the same level of granularity or we can go broader with broad demo or content targeting."

However, Sky's biggest challenge with implementing a biddable model is more of a trading challenge than a technical one.

"At Sky we are already open to many trading and transaction routes as long as it doesn't mean we give up control of our inventory and customer experience," said West.

"It's not to say we won't trade with agency trading desks and biddable platforms, but it must be under our terms in private marketplaces (PMPs) with guaranteed rates, where we will employ the data that is right for that transaction, without giving up control of that data or that impression.

At this relatively early stage, definitions are vital, since TV will be inherently different from online."

"Programmatic should not be about price alone or indeed about margins for the trading desk, it should be about driving effectiveness and efficient cross platform execution."

Alongside the Sky AdSmart example, Dominic Barry from StickyADS.tv also cited that Channel 4 now has a "collection of 11 million-plus registered users that they are using to target audiences against and match to BARB audiences."

Channel4 also announced a partnership with Freewheel, who are partnering with TubeMogul, Adap.tv(AOL Platforms) and Videology for their VOD offering. John Baylon from AOL, also confirmed that the business is developing "smarter, more efficient planning, buying and optimisation platforms...In Australia we've already partnered with MCN to deliver linear broadcast TV programmatically, a global media first."

Each stage of the development - as Jakob Nielsen of GroupM cites - creates "new models and relationships that will further develop the market. If we just worked on building strong relationships in each key stage of programmatic TV, we would go a long way to developing this marketplace."

For Jakob, the online programmatic model offers up inspiration but also a challenge in terms of transparency: "Fraudulent practices online have created a real trust issue and this will have a real impact on TV adoption."

Despite these obvious hurdles, Henry Rivero of RTL counters that the foundations for transparency could already be there, since TV adheres to standards and regulations that are trusted. However, TV has to be careful to protect that level of trust it has established.

Both the buy and sell side see genuine value in making a programmatic model work for TV - a point that was supported by an agency survey that FaR conducted to find out from a cross-section of media agency personnel when they thought programmatic TV would become an active marketplace, 56% of the panel said that it would be up and running inside three years, whereas only 12% responded that it would be one year.

Alongside technical challenges the panel cited that the key challenge was educating the buy side and clients on the value of programmatic TV.

Therefore at this relatively early stage, definitions are vital, since TV will be inherently different from online - and it's important that what this represents should be established from the beginning.

All of the people we spoke to agreed that the development would happen in stages, helping to establish common ground for the market to work with. Going through this iterative process will ideally provide the insight and learning needed to create the optimum model for the future of TV.

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