2017 predictions - Greenlight Digital

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D E C E M B E R 2016 The Predictions Edition

2017 PREDICTIONS

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PROGRAMMATIC TV: THE NEW FRONTIER OF AUTOMATED AD BUYING

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Display INA ARENS, HEAD OF DISPLAY Worldwide, the TV advertising market is estimated to be $200 billion strong, making up about 40% of all advertising spend1. While TV spend is still higher than digital ad spend, it’s predicted that by 2018, digital will overtake TV for the first time2. By 2019, the IDC expects Programmatic TV ad spend to be around $17.3 billion worldwide – only a fraction of the current $200 billion pie3. However, the arrival of technology and the vast data opportunities will open up endless opportunities for advertisers. THE CURRENT STATE OF TV BUYING TV advertising today is based on reaching a target

before the arrival of programmatic, where planners would

audience using TV panel data collected from thousands

identify publications suited to their target audience and buy

of households. The current ad currency is called ‘gross

inventory months before the actual campaigns went live.

rating point’ (GRP), which Nielsen Media defines as “a unit of measurement of audience size. It is used to measure the exposure to one or more programs or commercials, without regards to multiple exposures of the same advertising to individuals. One GRP = 1% of TV households” 4. As such, TV planners will seek out TV shows with the highest GRP within their target group and book slots associated with the best cost benefit while maximising their campaign’s gross rating points. This is reminiscent of digital advertising

The actual TV buying process is divided into upfront and scatter buying. Premium slots are sold when TV networks announce their new fall schedules – upfront. Any unsold slots are sold closer to the programme’s air time, known as the scatter market. Again, this is akin to display advertising when premium inventory was sold far in advance of a campaign’s actual flight, and any unsold inventory was sold to networks who would resell it onto the big media buying agencies in the form of packages.

HOW IS PROGRAMMATIC TV GOING TO CHANGE THIS?

To answer what programmatic TV is, we need to briefly

Secondly, the introduction of set-top box data expands the

detour and define the term programmatic in a more general

data universe far beyond Nielsen’s 40,000 households.

way. At its core, programmatic stands for the buying and/

All of a sudden, advertisers have access to millions of

or selling of advertising space using automation tools and

households. The data gained from the set-top boxes can be

utilising data during the buying decision process. That being

overlaid with advertisers’ first-party data (such as purchase

said, Google defines Programmatic TV “as a technology-

and CRM data), which can then be supplemented with

automated and data-driven method of buying and delivering

Nielsen panel data to allow advertisers to target beyond

ads against TV content. This includes digital TV ads served

age and gender. Think of that luxury car manufacturer

across the web, mobile devices, and connected TVs, as well

that wants to push out its new high-end car model to

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as linear TV ads served across set-top boxes” . So, how can

high disposable income households with no children –

programmatic enter and alter TV ad buying? Booking and

Programmatic TV will facilitate this level of targeting. They

trafficking systems, for one, will decrease the manual aspect

can even go a step further and overlay this with purchase

of TV buying and bring a higher level of automation to the

intent data, enabling the advertiser to focus on their target

process. This will have a positive knock-on effect on booking

audience rather than aiming for scale.

costs.

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Display

THE PROGRAMMATIC TV ECOSYSTEM The programmatic TV ecosystem shows a similar build to programmatic display advertising:

DMPs

There are the specialist media agencies that focus on TV buying. These agencies (or trading desks) use demandside-platforms (DSPs) to automate their buying process.

DSPs The sell-side-platforms (SSPs) integrate with the TV systems of the various TV networks, allowing them to automate the

SSPs

selling of their inventory (TVC slots).

Consequently, the TV network or publishers supply the inventory that’s being sold and bought via the SSPs and DSPs.

TV network or publishers

Overall, it’s fair to say that programmatic will change the face of TV as we know it and open many new opportunities for advertisers and brands alike. I’m looking forward to watching how 2017 unfolds in terms of Programmatic TV and to see how this seismic shift redefines advertising – watch this space!

1. 2. 3. 4. 5.

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http://www.marketingprofs.com/charts/2015/26727/projected-2015-2017-ad-spend-growth-by-region-and-channel http://theexchangelab.com/news/future-programmatic-tv/ http://wywy.com/market-view/programmatic-tv/ http://www.nielsenmedia.com/glossary/terms/G/G.html https://www.thinkwithgoogle.com/articles/evolution-of-tv-programmatic-tv.html

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Display

“Just as digital advertising had to adapt to new market trends and changing revenue models, TV must do the same.”

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