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Programmatic buying represents ‘next frontier’ in TV advertising

Programmatic buying represents ‘next frontier’ in TV advertising

Slowly but surely, media buyers are turning the channel on TV advertising.

In the TV industry, an emerging concept known as programmatic buying is automating ad purchases and, more importantly, allowing sharper audience targeting. Programmatic buying promises to be a much-buzzed-about topic at the 2015 NAB Show.

In September, agency executives participating in a panel during Advertising Week predicted programmatic buying would account for as much as 5 percent of TV ad buying in 2015, up from 1 percent in 2014.

“While the technology for deploying a true programmatic TV buy is still in the future, there are other technologies that are making TV buys more automated,” according to Capital Media, a media-planning and media-buying agency.

Programmatic buying lets brands and agencies target TV ad audiences beyond age and gender, according to software company TubeMogul. Relying on data from Nielsen and others, the company’s technology enables targeting by age and gender as well as factors such as income, ethnicity, education, home ownership and pet ownership.

“TV is the next frontier for data-driven marketing,” said Joshua Koran, senior vice president of product management at Turn, whose software allows programmatic buying of TV ads.

One hurdle on that frontier, according to Ad Week, is reliance on traditional TV ratings and age-oriented demographics to guarantee impressions against particular audiences. Furthermore, some players in the industry worry that programmatic buying will turn ad inventory into a full-fledged commodity.

Despite those concerns, the programmatic-buying trail is being blazed.

For instance, TubeMogul in December introduced a software product that enables automated, data-driven buying of TV ads. Among the brands that have signed up for the product, called TubeMogul PTV, are 3M and Allstate.

TubeMogul says the software aggregates TV ad inventories from cable TV providers, satellite TV providers, national TV networks and local TV stations. 

“Historically, the planning and buying of TV ads has been a time-consuming, manual process that offered little room for optimization,” TubeMogul says.

Through analysis of real-time data supplied through software like TubeMogul’s, brands and agencies can tweak TV ad spending on the fly, the company says.

Brett Wilson, co-founder and CEO of TubeMogul, said: “By automating TV buys, marketers can focus on strategy and better results for their clients.”

A couple of high-profile instances of programmatic-buying strategies have surfaced recently in television.

Through programmatic buying, digital marketing agency DigitasLBi purchased local TV spots in eight US markets for the 2015 telecast of the Oscars — a first for an agency. DigitasLBi didn’t identify the client. The agency made the buy using software from TubeMogul and another company, WideOrbit.

“We wanted to really get in the marketplace with programmatic television,” Scott Marsden, senior vice president of media at DigitasLBi, told Broadcasting & Cable. “Obviously, we know that there is going to be more and more availability of inventory there, and we want to develop the expertise as quickly as possible.”

Eric Mathewson, founder and CEO of WideOrbit, said: “Programmatic will be how the majority of television advertising is sold in the future.”

Earlier this year, food conglomerate Mondelez International turned to software from TubeMogul and WideOrbit to programmatically buy TV spots for the Super Bowl. Ads promoting two Mondelez products — Oreo cookies and Ritz crackers — aired in Erie, Pennsylvania. This campaign marked the first time that programmatic buying of broadcast TV ads has taken place during the Super Bowl.

The Super Bowl “is clearly the No. 1 broadcast event delivering great value to advertisers. Mondelez International’s pioneering effort demonstrates how leading brands can efficiently deliver incremental advertising dollars to local broadcasters through programmatic technology,” Mathewson said.

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