What Is Programmatic TV and How It WorksJune 15, 2022
As you may know, programmatic advertising is a wide and increasingly expanding area that covers quite a large number of media spaces and ad formats. One particular field of programmatic solutions that we didn’t cover much on our blog previously is programmatic TV advertising.
And it feels like it’s time to change that, as programmatic TV is another market niche that is rapidly developing and expanding these days. So what “programmatic TV” actually stands for and how programmatic TV buying works? Keep reading to find out.
What is programmatic TV advertising?
Programmatic TV is a general term used to describe all the activities related to utilizing programmatic technologies to automate buying and selling of ad space in television content. This includes all the processes of choosing, buying and delivering digital TV ads served across various channels such as connected TV (CTV), mobile devices, OTT services and web.
If you are not very familiar with CTV and OTT, check out our older articles where we explain what CTV and OTT are and compare them to one another. In short, CTV stands for Connected TV, which is a term for connected streaming devices such as Apple TV, Roku or Chromecast. And OTT (over-the-top) is a term for media services such as Netflix, Amazon Prime, Disney Plus, etc.
Why is programmatic TV buying gaining massive popularity?
As said, programmatic TV buying covers buying and selling of digital ads throughout various connected TV channels, as well as gathering and using audience data for the ad targeting. And as we know, in most cases programmatic advertising technologies emerge from the needs and pain points of traditional methods of buying and selling digital ads.
In the case of traditional TV advertising, indeed it had a number of major problems, providing an opportunity for the programmatic TV buying solutions to address them. Mainly, it was the fact that the traditional process of buying and selling TV ads couldn’t meet the efficiency standards of the new era. In other words, the negotiations when buying and selling ads took way too long and required too many interactions between the parties involved.
Additionally, the entrance threshold for TV advertising traditionally has always been quite high. As a result, many companies with low advertising budgets were not able to afford placing TV ads. Programmatic TV buying solutions address this problem, allowing advertisers to execute highly targeted campaigns without the need to invest huge budgets in it.
Another major problem associated with traditional methods of buying and selling TV ads was insufficient data. Prior to various versions of CTV and OTT solutions becoming commonly used, it was very difficult for platforms to provide user targeting based on age, gender and other demographic characteristics. Programmatic TV advertising solutions are designed to address this issue as well. The ability to collect and use data plays a very important role in programmatic TV buying, as its high quality allows brands to show highly targeted ads based on user behavior and intent.
So programmatic TV buying provides advertisers with a wide range of ways to buy and sell TV ads across different platforms and with a large number of processes automated.
Benefits of programmatic TV buying
Naturally, utilizing programmatic TV buying methods provides a handful of benefits to all market participants. Here are several key strengths of programmatic TV advertising, thanks to which this market has been growing so rapidly over the last several years and continues to do so.
Speed and cost-efficiency
Being able to automate a large number of processes related to buying and selling TV ads is certainly one of the biggest advantages of programmatic TV buying. Using programmatic TV advertising platforms saves companies a lot of time and money.
Higher reach and better user targeting
Second key strength is that programmatic TV solutions allow advertisers to increase their audience reach to people consuming TV content on various devices and platforms. As well as to considerably improve the precision of targeting to connect with local audiences, for example. This allows brands to significantly up their ad exposure at an optimal price.
Minimized errors and streamlined processes
The ability to automate and streamline all the processes related to buying and selling TV ads leads to effective error elimination, which is another benefit of using programmatic TV buying compared to traditional methods. In programmatic TV, platforms automatically send requests, receive orders, accept proposals, and execute other actions based on initially set up requirements.
Leveraged audience data
The ability to incorporate new and multiple sources of data is another huge benefit of programmatic TV buying. It allows the execution of truly in-depth and precise TV advertising campaigns with clearly defined goals and targeting metrics. Which is made possible by leveraging various data sets such as viewership data for CTV and OTT platforms, as well as publicly available information of different sorts.
Rich measurement capabilities
Additionally, programmatic TV buying provides advertisers with a rich selection of powerful measurement capabilities. This allows them to have detailed data on the campaign and its effectiveness, measuring a variety of metrics such as brand impact, awareness, audience interest, etc.
Programmatic TV buying is one example of how programmatic solutions are transforming the modern-day digital advertising market across media channels, solving problems and delivering benefits to all parties.
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