The Future of Programmatic Television

Programmatic television is a dynamic that drives change and potentially transforms the way television is bought and sold. While the traditional television model has worked for decades, it is not without its inefficiencies. In this article, we want to talk about its evolution and expose its positive impact for brands, programmers and distributors.

From Traditional Television to Programmatic Television

Quite frequently I have heard that the Internet was going to put an end to television, just as it was said that television was going to end radio. I believe that no medium gets to disappear. What remains obsolete are the media through which they are consumed. Not even the press is dead, the paper press is probably in its last years of life, but that’s not why newspapers are going to stop being consumed. Will get they read on a Tablet? Yes, but they are still news from a newspaper where journalists tell us what is happening in the world. The radio also increases its consumption of podcasts and on television the consumption of on-demand content increases.

However, the media evolve along with the way of consuming them and generating engagement with the consumer, the experience they offer us changes and the way they are marketed also evolves.

Programmatic television is a clear example of this type, where the efficiency models of digital advertising are applied to programmatic tv advertising, obtaining results that decades ago wasn’t even imagined we would get.

The traditional model of buying and selling television advertising has worked for a long time, but right now it is ineffective. Much of the work is quite manual with insertion orders, emails with tactical planning, and even (until recently) faxes. It also prevents segmenting as it would be needed for certain advertisers, and even if you plan the best optician in the world trying to reach a well-defined target audience, you depend at the end of the chains, on the passes they want or can give you and what place in the ranking of advertisers and investment you occupy to be able to make changes or choose the correct pass.

The operation of traditional television advertising focuses on reaching an audience (for a sociodemographic target), obtained based on the data calculated by the audiometers placed in the houses of a panel of about 5,500 households.

Traditional vs. Programmatic

The currency of traditional television advertising is the GRP (Gross Rating Point). And based on the GRPs, the investment allocated for the campaign is calculated, multiplying the number of GRPs obtained by the price of each GRP set by the television channel for each sociodemographic target.

Television planners identify the spaces with the largest audience and affinity for their core target and request the spaces to broadcast their campaigns, and I say request because in the end the network has the last word and is the one that awards you the passes. (And not all of them will coincide with what was planned at first).

Programmatic television has certain advantages over traditional:

It has the ability to reach very specific audiences.
The campaign can be monitored in real time, so you have a greater margin of reaction to be able to redirect your planning and achieve your objectives, while in traditional television you have a margin of one day (at least) and if you have a campaign that ends after the weekend or a bridge… pray.

On the other hand, programmatic television also has negative points:

Audience segmentation and workflow automation do not yet have the same level of sophistication for linear television that can already be found in the programmatic video.
Currently, there are not many agencies prepared to work directly with this model. They do not have adequate technology for programmatic television. The most advanced markets in programmatic television are the United States and England.
When technology advances enough for agencies to work with the programmatic television model, when audience segmentation is fully possible and effective, and when the buying and selling process is fully automated, programmatic television will become the way of marketing advertising space and will offer advantages to all those involved in the process.

Developers and distributors are going to see revenue from ad inventory grow coming from any type of device. Advertisers will be able to focus directly on their target, no matter how specific or segmented it may be, and thus more easily reach only their potential buyers.

On the other hand, viewers will not be inundated by repetitive and irrelevant ads. In addition, over time it will be more and more difficult to impact depending on the age group because the youngest consumes television in a completely different way from the consumption that has been observed in recent years by the adult target.