Programmatic TV Buying: The Difference Between What’s Said and What’s Heard
Bryan Noguchi, Senior Vice President, Media Director
I’ve been waiting patiently for a revolution in the media business and preparing for the inevitable shift to programmatic TV buying. It’s been a long wait that I believe will last for quite a while longer.
Let me first say that I’m not some media Luddite who spends his days preserving and defending archaic systems of exchange and measurement. Quite the contrary! There’s actually more digital in my career history than traditional media. I want this to happen, and I do honestly believe that it will.
But we’re mired in semantics right now, and there’s very little incentive for anyone to move this along at a rapid pace. I’ve written and spoken about the obvious hurdles – the nature of finite inventory and disparate inventory management systems, to name a few – but I think the slow pace of change is actually tied to two subtly nuanced things that don’t get much play: how we define what we mean by “programmatic” and what we want people to believe when we say programmatic.
Evocation And Belief
The media term “programmatic” is tinged with desire and belief. To my digital media ear, it is tied closely to the notion of open inventory exchanges and real-time bidding (RTB). It evokes the idea that market forces will dictate the value of media inventory and instantly match and serve my ads to a designated audience at a competitive price.
Indeed, these are fair base parameters for any modern digital buy, and rationally and emotionally, it’s everything that I could ask for: right audience, right price, no waste. You can imagine how tantalizing this perceived promise of programmatic must feel to a traditional advertiser, because it evokes the notion of buy transparency and accountability – two things often lacking in traditional media buying.
This is what any network would want to suggest if they were rolling out programmatic offerings, but I’m willing to bet that it is a long way from what is currently meant.
Not The Digital Definition Of Programmatic
Not to oversimplify things, but so far, what I’ve seen in the third-party programmatic TV marketplace can be grouped into one of two camps: interesting technology sitting on top of pretty dismal inventory or good inventory covered by a technology stack that looks a lot like an agency’s buying department.
But currently, in each case, the primary role of programmatic is clear and seems to me to be more about the mechanization of inventory management as a labor-saving device than it is about open markets. It’s mostly about process – the connection of inventory to buyers in a more automated fashion.
While many of the recent network offerings deliver on the above points, I’ve also seen glimmers of advanced audience-targeting. It’s pretty cool, but when you’re dealing with a finite inventory, narrow targeting jeopardizes the ability to scale. I have seen some tacit acknowledgement of scaling issues in this context addressed via the imposition of parallel buy mandatories – that is to say, one can access advanced targeting if one also commits to a broader-based buy that is not audience-targeted.
It’s a clumsy start. Basically, I can buy “that particular slice of the pie” and pay a premium for that choice, as long as I buy most of the rest of the pie. Until the number of advertisers demanding narrow targeting capabilities reaches the point where they can be relied upon to gobble up each other’s remainders, I guess this is what we’re stuck with.
So, despite what programmatic conjures in my digital mind, it’s clear that the traditional media definition is already its own beast.
Protect What You’ve Got
I have yet to see a programmatic TV solution that promises RTB or purports to be accessing something other than the inventory already available, either in the upfronts or on the scatter market. And this makes total sense.
Honestly, if I were the owner of TV inventory, I would make my first job the preservation of its value. I might create structures that would allow advertisers to bid prices up, but I would certainly also attempt to block any market forces that threaten to drive the price of that inventory down.
If I were crafting a press release about my programmatic offering, I’d be sure to mention demand-side platforms somewhere, but when it came to my inventory, I would always be careful to describe what is effectively a supply-side platform, but perhaps without explicitly labeling it as such. I suspect that this is why we’re seeing a lot of the early forays being limited to certain agencies or clients – these are effectively private exchanges, and given the lack of uniformity in how each network manages its inventory, they are likely to remain so.
What can we say about the near future of programmatic TV buying? I expect the process to become streamlined, saving both buyers and sellers time and labor. Technology and tradition will be the best frenemies ever.
I expect to see wider availability of advanced targeting, but at a premium. Democratization and transparency? Eventually. For now, all I can say is that it is appropriate for everyone to believe in both, but I’d cast a suspicious eye toward anyone promising them at this point in the game. Ask me again in a year or two.