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What the Heck is Programmatic TV



Programmatic TV provides the opportunity for buyers of TV advertising to reach their audiences based on data rather than the traditional manual method of upfront buying and selling. Programmatic media buying is defined as the “data-driven automation” of buying ads against TV content.


Programmatic TV is considered to be the most similar to traditional TV among all the advanced TV products. Advanced TV is IAB's umbrella term for all forms of streaming TV content. The main difference is that Programmatic TV makes it possible to buy media through an automated DSP that leverages consumer data and offers a more advanced method of measurement, both of which are capabilities not offered by traditional linear TV.


Current State


While media has been bought programmatically in the digital space for quite some time now, we have yet to see the full adoption of Programmatic TV. Currently, Programmatic TV is mainly seen on digital linear TV platforms like Sling TV. In early 2017, the Dish-owned Sling platform introduced targeting segments (auto intenders, vacationers, back-to-school, etc.) in addition to its more traditional targeting options like age and gender.


Sling uses anonymous information from its subscriber base and matches the first-party data with consumer data from Acxiom to create targeting segments. Advertisers on Sling are able to access inventory through auctions with sell-side vendors. The common notion within the programmatic media buying industry is that when the technology is further developed, it may be possible for this same model to be used on terrestrial linear TV.


In mid-2017, FOX became the largest major broadcast group to offer programmatic inventory, offering programmatic access to premium local broadcast inventory. In the opening week of 2018, programmatic media-selling company, WideOrbit, announced it now possesses programmatic local inventory on over 1,000 TV channels. The inventory includes the top 50 US markets and a total of 181 markets, reaching more than 96% of US TV homes.


Although much remains to be seen in the evolution of programmatic media buying for TV, the idea of being able to granularly target an audience on a historically traditional medium like television is certainly intriguing for marketers. Already in 2018, there have been major milestones in Programmatic TV, and there is a great deal of buzz around the topic for the remainder of the year and beyond.


Industry Forecasts


Even though the full potential of Programmatic TV is yet to be realized, research indicates the topic is gaining traction in the industry at a fast pace. According to PWC, Programmatic TV will make up around 1/3 of global TV ad revenue. Similar research from eMarketer suggests 5% of all US TV ad spend in 2019 will go towards programmatic media buying, growing from $640 million in 2016 to $3.8 billion in 2019. As more companies like WideOrbit expand their programmatic inventories and as more broadcast groups like FOX add programmatic to their offerings, the proliferation of Programmatic TV will continue.


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