The Future of Programmatic TV


 

Amidst a sea of consumer and industry change, one thing has stayed the same—advertisers’ desire to establish meaningful, effective connections with potential customers to ultimately earn their business.

While B2C companies such as Hershey’s have historically spent around 90% of their media budget on traditional television, that percentage is starting to change. In 2014, large numbers of consumers began migrating from viewing content on traditional TVs to viewing content online. In the last few years, even traditional digital ads have evolved from static formats to more interactive formats. And chances are that in the next few years, online video advertising and interactive ads will proliferate even further.

Why the sudden shift? It’s because these formats are effective at capturing the attention of consumers. According to eMarketer, completion rates for U.S. digital videos ads on over-the-top (OTT) devices such as connected TVs were 93% and 78% for smartphones respectively.

For more facts, figures and definitions around programmatic TV, download DataXu’s Rapid Rise of Programmatic TV white paper.

While television advertising is still valuable, it’s becoming something different than it once was. During an industry panel at Cannes 2016, hosted by DataXu, Comcast, Hershey’s and SKY discussed this change and where television is likely to move next. Comcast’s Frans Vermeulen perhaps said it best when he labeled the future of programmatic television as “New TV.” Watch the brief video below to hear perspectives on everything from unduplicated reach to dynamic creative to true addressability.

UNDUPLICATED REACH

During the panel, the speakers make the point that in today’s cross-device world, unduplicated reach across all devices is the end goal of all end goals. However, actually reaching that goal is extremely difficult due to fragmentation and the amount of technology required. Consumer IDs are now spread across mobile, online and television—and the U.S. market is fragmented across 10-15 pay TV providers. Achieving unduplicated reach requires access to consistent, constant data.

DYNAMIC CREATIVE

While technology in the U.S. does exist today to serve ads dynamically through programmatic TV, creative agencies are still playing catch up when it comes to the world of programmatic. If advertisers do want to go the route of designing dynamic creatives, they must provide creative agencies with clear briefs defining the need for multiple creatives upfront. Dynamic creative is complex and may require hundreds of variations and dozens of audience segments. Effective cross-channel dynamic creative requires an idea deliberately designed to work across channels from the start—and expressing that to the agency is the responsibility of the advertiser.

TRUE ADDRESSABILITY

Programmatic TV spending is expected to more than double this year, climbing 128% to a total of $710 million. With upcoming advances in technology on the horizon, advertisers will soon see more opportunities for improved advertising addressability through television. In the near future, consumers will be able to decide what content is accessible through their TV sets. Programmatic will enable more personalized programming than ever before. And moving forward, agencies, advertisers and programmatic partners will begin to work more closely together than ever before as equal partners to execute campaign strategies across all channels—television included.

Learn more about The Future of Programmatic TV in our Cannes Lions 2016 video panel featuring Hershey’s, SKY, Comcast and DataXu.