Media Two Interactive

Programmatic TV: The Good, The Bad, The Fuzzy – Part 1

In order to truly dive into the programmatic TV space, let us first separate it into the way we see it: the good, the bad and the fuzzy. This first blog post will tackle the good, everything that we have come to love in buying TV programmatically.TV upfronts are a 50 year old tradition where television networks secure between 50% – 70% of their revenue. It’s where agencies get to preview new shows and secure lower rates for the entire year with long-term media commitments. A sound idea, but it leaves very little room for flexibility with seasonal initiatives, new product launches or shifts in audience targeting. So what happens when a brand has a new initiative mid-year, wants to test a new network or wants to target a specific audience over content? In the past, TV buyers have been limited.That’s where programmatic TV comes in. Programmatic TV acts as support for those national buys by giving brands flexibility and better targeting that isn’t available with traditional TV models. Programmatic TV is similar to programmatic buying in the digital space. Spots can be purchased through private marketplace deals or through the open exchanges with auction-based bids. If brands are curious about running supplemental programmatic TV campaigns, they need to look at all factors when it comes to implementing those buys.Better Targeting: The success of any media campaign hinges on the targeting that’s available. Traditional TV campaigns determine their targeting based on Nielsen data. Those campaigns are typically negotiated on age and gender and reported on through ratings point data provided by the networks. It’s an archaic model that relies on viewing diaries and a couple thousand metered panels to record viewing habits. Programmatic TV campaigns rely on set-top box data across millions of homes. A bigger audience pool means greater validity to the data. They can integrate that data with DMP (data management platform) audience data to allow for more granular buying tactics. For a brand that’s looking to target females who drive luxury vehicles, programmatic TV allows them to layer on that additional targeting criteria across a broader set of networks rather than just one network.Lower Costs: Granular targeting is great, but media boils down to costs. At the end of the day, brands need to drive sales as efficiently as possible to hit their forecasted goals for the year. According to Media Dynamics, Inc., the average primetime CPMs for broadcast and cable TV networks increased 4% last year to $24.40 and $13.34 respectively. Because programmatic TV aggregates unsold inventory, it’s offered at a lower price point. It gives brands that may not have millions invested in national TV campaigns opportunities to test specific networks at a lower price point without significant upfront commitments.Increased Efficiency: A general rule of thumb in media is the more time that can be devoted to optimizing campaigns, the more profitable the campaigns. Most traditional TV campaigns are a mix of buys through the national networks, the cable providers or the local broadcast stations. Depending on the mix of DMA targeting and providers, a TV media calendar could have dozens of partners. That eats up a lot of time through RFPs, negotiating placements, contracting the buys and trafficking the placements to each of the partners. With programmatic TV buys, it narrows down the number of partners to a handful of platforms that run the various placements across a number of different markets, channels and dayparts. Those same placements can be implemented within just two or three platforms and adjustments can be made to the campaigns without having to wait for confirmation of changes from the various partners. With this automated process, there’s less time spent contracting and more time can be devoted to optimizing the actual TV buys.With better targeting, lower costs and increased efficiency through a more automated media process, why would brands still be running the bulk of their TV spend through the traditional TV model? It sounds like programmatic TV is too good to be true. Depending on the messaging and objectives, that could be the case. Tune in next time to learn more about the downsides to running programmatic TV campaigns. Same M2i time. Same M2i channel.Contact us to learn more about our programmatic TV buying capabilities.
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