The Convergence of Digital and TV
At the same time we’ve experienced a shift in how and where consumers view video content, the technology used for targeting and placing digital advertising has also dramatically evolved. Those two factors in combination are driving a foundational shift in the television advertising landscape. So much so that the term “TV” is now dated and is being replaced by the more nimble term of “video.” This shift has complicated the process of reaching consumers via video-based content, but it has also brought marketers improved targeting and efficiencies, as well as greater opportunities for creativity and engagement.
The Video Viewing Evolution
Traditional TV viewership has decreased over time, particularly among adults ages 18 to 49 and dramatically among adults 18 to 24.
Much of this drop has been driven by the increased use of alternative online video viewing options such as TV-connected devices, PC video, and tablet and smartphone video.
Not only have viewing platforms proliferated, but the breadth of what is viewed has grown exponentially to include content that would have never been aired on TV (think YouTube and Vice, for example). The term “TV” can’t come close to representing it all, so we’ve come to adopt the term “video” to represent any advertising opportunity available within video content (inclusive of TV and all online video).
As you might expect, there are aspects of this new video landscape that make it more difficult to plan and execute campaigns. There is yet no common approach to measurement or common metrics for assessing the various video tactics–which can make planning, integration, and reporting difficult. With viewership so fragmented, achieving high-reach levels has also become more challenging. But on the flip side, the purchase of video-based availabilities has become more efficient and democratic. In the not too distant past, the largest brands and largest agencies secured the best pricing for television advertising. In the new video landscape, the commodity purchasing model is evolving into a more targeted, bid-based and automated model involving more players and a more level playing field. And the rise of programmatic buying is accelerating this.
The Programmatic Factor
Programmatic is essentially a fancy word for “automated audience buying.” Its popularity in digital advertising has been driven by a few factors.
- It provides the ability to automate what would be an impossible manual task: making buying decisions with regard to the placement of potentially millions of individual online impressions.
- It improves cost efficiencies by enabling real-time bidding for inventory and eliminating intermediaries.
- It also dramatically improves audience targeting by allowing for the integration of first- and third-party data.
Since programmatic has transformed and improved the process of placing online advertising–including online video–it’s only natural that marketers have wanted to extend the concept to the purchase of television advertising. While it’s still in its fledgling state, there are two types of programmatic buying for TV:
- Linear (TV): buying direct through the TV networks or local stations.
- Non-Linear (Online): buying addressable video and digital video inventory.
Programmatic in general is more conducive to non-linear styles of video purchase, where the approach is all about targeting individuals, rather than mass audiences. Non-linear programmatic will catch up–if only due to agency and marketer demands for it. Ultimately, these two will intersect to form an all-inclusive video purchasing marketplace.
Challenges to Be Met Over Time
According to Scott Ferber of Broadcast and Cable magazine, there are three main hurdles before programmatic is a solid option:
- Availability of Data–Data is the connective tissue behind all programmatic buying. While cookie data and other third-party data is available for digital video, linear TV data remains a challenge.
- System unification–Technical requirements for bringing programmatic capabilities to linear TV feeds are complex and not there yet.
- Cross-screen measurement –Finding ways to measure cross screens/devices that deliver efficiency, effectiveness, and ROI is still in its infancy.
The shift away from a TV-centric world and mass-scale buying techniques that consider only GRP efficiencies is underway. And given how significant the coming improvements will be, we expect the velocity of change to only increase. This should not be viewed as a wait and see scenario, but rather a jump in, experiment, and benefit from all the innovation that’s driving a new world of video advertising.