Cracking the Programmatic Conundrum

Emmanuel Josserand Brand, Agency and Industry Relations

This year is expected to be pivotal for programmatic TV, but before rushing headlong into the automation of the ecosystem, the industry must ensure it has a deeper understanding of the opportunities automation opens up.

Programmatic is often seen as a way to reach ‘lost’ TV audiences who are consuming premium video content via a multitude of platforms and screens, leading industry players to apply programmatic buying practices without really understanding their benefits. This creates a conundrum where the technology is being used to realise an opportunity without comprehending the root of the issue.

To make the most of programmatic, it is vital sellers are able to convey inventory value and maintain premium advertising experiences. The approach must be to map the advantages that programmatic offers to business realities, and then match it to the workflows and technology necessary to realise it. Programmatic adoption is not about a shift in audience value or a way to access inventory cheaply. Instead it is driven by a complex combination of shifts in market dynamics, technological maturity, data availability, budget allocation, and inventory management.

Programmatic when executed well can provide a tremendous opportunity to broaden ad sales particularly on OTT and other streaming platforms. Through a better understanding of the viewer via deeper data layers that broadcasters and platforms can provide, if utilised in a transparent way, programmatic TV can deliver campaigns effectively and provide a great ad experience. It benefits all in the value chain from advertisers to publishers, as well as the viewers

JAMIE WEST
Deputy Managing Director
Sky Media UK

The three strategic approaches explored in the whitepaper are:

Growing local markets

• Some premium video broadcasters and pay TV operators are using programmatic to reduce TV advertising’s barriers to entry.
• This is allowing a new market of advertisers to focus on addressable audiences (rather than gaining national reach) with an overall lower spend.
• This strategy is enabled by a programmatic guaranteed workflow which allows buyers and sellers to execute fixed-price, guaranteed transactions via the same Open RTB protocol used to enable open auction and private marketplace (PMP) transactions.

Making more inventory available

• Premium video broadcasters and pay TV operators provide superior engagement environments with curated ad breaks containing appropriate volume of advertisements, aligned to content, separated by industry, frequency capped to avoid repetition, and – if addressable – targeted for relevance.
• Maintaining the value of this curation requires a certain proportion of unallocated inventory to allow for full campaign delivery.
• Using PMPs, broadcasters can open up more of their premium inventory without putting their direct-sold commitments at undue risk, driving demand for more valuable audiences in sought-after environments than other options DSPs may have access to.

Growing overall market value

• Broadcasters value the security of upfront trading, as they have a protected share of the buyer’s budget and guaranteed revenue to invest in content creation.
• Demand for unsold inventory close to the delivery date could allow the broadcaster to realise a level of additional margin compared to the upfront price, but this involves an element of risk.
• Programmatic with enhanced data and addressability can compete with direct sales in terms of yield; by allocating inventory to upfronts, direct sales, and programmatic, sellers can balance their long-term sales strategy with shorter-term risk appetite, growing overall market value.

There are benefits for sellers who embrace automated sales, especially with today’s fragmented audiences when manual operations can become very time consuming. Programmatic should not be seen as a do or don’t. Those who fail to embark will face an uncertain future.

MIRANDA CONROY
Nordic Head of AVOD Monetization & Business Development
Nent Group

Programmatic is proving effective at growing premium marketplaces in terms of both new advertisers and new options for advertising spend. When the industry fully understands the opportunity programmatic opens up, the technology will benefit everyone in the value chain, including buyers, sellers, and viewers.

Read a more in-depth analysis of these three strategic approaches by downloading the whitepaper >>