So what is programmatic TV, anyway?

This article was written by Gabe Greenberg, GM of Advanced TV at The Trade Desk.

By now, the term “programmatic TV” has reached the buzzword saturation point. It’s been overplayed, misused and confused by many (you know who you are…), and it hasn’t even become common practice yet. So let’s call it “Advanced TV.”

When an agency or brand tackles TV advertising, there are two main things on their mind: creating an ad that meets broadcast standards, and placing a media buy for airtime that reaches a key audience. Both of these are set to see substantial improvement with Advanced TV.

Our State of the Industry report found that buyers expect automation and addressability from any Advanced TV offering. This is exactly the way buyers should be thinking about it, and it sets the course for TV’s real programmatic future.

Today, agencies buy billions of dollars of TV inventory, and most would say they do so effectively. But what’s still lacking is better targeting and addressability. For this reason, DSPs and ad networks that enter the Advanced TV space with a managed service approach will not survive there for too long. Buyers aren’t going to be lining up to pay more for a “service” if its main job is just to push IOs like a next generation ad network.

Unfortunately, this describes most of the “programmatic TV” buying and selling that has occurred to this point. And it’s a main source of the confusion of what Advanced TV can and should enable.

The findings also showed that many buyers, especially those buying TV “programmatically” today, view Advanced TV as a means to get a lower CPM. However, it’s the third of respondents saying the CPM will be the same or higher with Advanced TV that are closer to the mark. With TV inventory already a scarce commodity, it’s hard to believe that sellers would give up this leverage by allowing the CPM to slip, further hurting their margins.

These myths and misunderstandings aside, the value of truly Advanced TV is the elimination of waste through the use of automation and addressability. Buyers are willing to pay more to target specific segments like the fence-sitting voter in Ohio, and sellers can expect to benefit from this demand for addressability. As the market matures, some buyers may indeed see lower offers, but, in a world of targeted TV, CPMs will bounce back. And then they’ll go up even further. Less waste equals higher efficiency. Higher efficiency equals higher CPMs.

Buyers want a transparent, automated buying platform that allows for addressability and more advanced features like multi-channel targeting and attribution. Companies like The Trade Desk will deliver it — at scale. Stay tuned.

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