White paper: Despite strong appetite, programmatic TV faces many hurdles
While the future of programmatic TV ad trading looks both promising and inevitable, there are still huge barriers to overcome, a new TubeMogul white paper has found.
After conquering digital, TV ad buying remains one of the last frontiers for programmatic, where agencies and brands are keen to improve efficiencies in a media where billions of pounds are spent on methods that have changed little over the past 30 years and where targeting is limited.
TubeMogul interviewed broadcasters ITV, Channel 5 and Sky; brands Nestle, Nationwide and Match.com; and media agencies MediaCom, Magna and G14, asking them to give their views on the future of programmatic TV.
While the majority of the nine representatives agreed that programmatic TV has the potential to benefit the entire industry, the report highlights a number of key concerns.
Lack of infrastructure, fear of commoditisation and difficulty in automating regulations which ensure TV advert compliance were among the main concerns, as well as programmatic being perceived by some as a threat to the current way of transacting rather than an additive approach to TV.
ITV’s group commercial director, Simon Daglish, said that ITV trading programmatically is “some way off” and “faces many challenges.”
“There are many changes we would need to make, not only from a regulatory point of view but also from a technological one,” Daglish said.
“Programmatic TV is reliant on information. To make it work, we would need to ensure that the data is correct and that it’s being used effectively when advertisers are making their campaign purchases.”
However, despite challenges, there is clearly a strong appetite for automation in the TV industry – particularly from agencies.
MediaCom’s digital trading director, Martin Galvin, said that the UK would benefit from introducing programmatic TV, largely because of its efficiency.
“From our experience, programmatically-traded media is more efficient. And as a media agency, we clearly want to eke out maximum efficiency on behalf of our clients,” he said.
“I don’t see what difference the medium makes as to whether we trade programmatically or classically? The goal is the same – the most targeted and effective brand exposure at the lowest cost.”
Galvin’s comments were echoed at this year’s Advertising Week Europe, where Scott Moorhead, digital trading director of Havas, said that agencies are in a hurry for automation.
“We want to buy all of linear TV programmatically,” he said. “That won’t happen, but which of the broadcasters will be bravest to support this?”
However, Writing for MediaTel-Newsline, Lindsey Clay, chief executive of Thinkbox, said there are “plenty of hurdles” to clear before TV goes programmatic.
“Why would TV, the most enjoyed and effective advertising, embrace the algorithmic practices of online display, which is the least trusted and liked form of advertising around currently?,” said Clay.
“TV is already automated as much as it needs to be; it won’t be in a position technologically to be programmatically bought any time soon; it is regulated in a way which makes programmatic buying very complicated; and the way it is traded is far more transparent and trustworthy for the people whose money is being spent: the advertisers.
“TV will certainly get with the programmatic…to some extent at some point, but there are plenty of hurdles to clear before then.”
Channel 4 has already dipped its toe in the programmatic waters with an exclusive partnership with Freewheel making it the first broadcaster in Europe to have developed a programmatic trading platform for its TV on-demand service.
The UK’s second largest commercial broadcaster now offers agencies and advertisers the opportunity to buy ads in real-time, as well as giving access to its first party viewer data.
However, a linear programmatic offering – as noted by Jonathan Lewis, head of digital & partnership innovation at Channel 4 – is still a long way off yet.
Commenting on Wednesday’s report, TubeMogul’s managing director, Nick Reid, said that the company does not see programmatic TV as an immediate replacement for the traditional ad buying and selling models currently employed for premium television inventory.
“Instead, we believe it adds significant value as a complementary marketing tool to supplement premium ad buys,” he said.
Read the full report – for free – here.