As industry buzz around Programmatic TV (or PTV as we’re going to call it) reaches a near-deafening pitch, we thought this would be a good time to dig in and figure out what’s real and what’s ... on the roadmap.
As went the early days of Programmatic Display, the definition of PTV is very much in the eye of the beholder. As an industry we haven’t been able to fully articulate what PTV is (we just wrote out a definition for regular programmatic three years ago). Here at AUSAM we spoke with buyers, sellers and facilitators to understand what’s happening out there. What we found was equally interesting, confusing and promising for the future of TV.
What's For Sale
There are a few different inventory types available for PTV. First, there is Linear. Linear is what we think of as traditional TV. This could be content delivered via cable, satellite, or even antennae (gasp). Linear is live, scheduled, TV and targeting is limited to demos or behavioral information available from Nielsen. Nielsen has a panel of consumers they poll and then extrapolate the results to the greater US population. From there they map out which neighborhoods or geos index the highest for certain behaviors - say, coffee drinkers - and when Starbucks wants to buy TV they use Nielsen data to decide which geos to include in their buy.
Next is Addressable. Addressable content is delivered through internet-enabled set-top-boxes (STBs) which allow you to buy hyper-targeted inventory. Because the STBs are connected to the internet, buyers can leverage the behavioral and first and third-party data targeting we’re used to in the digital world. Meaning instead of buying inventory based on geos (like with Linear) - you can individually target specific households based on viewing, purchase or online behaviors or by matching them up against an advertiser's first-party list.
To be VERY clear on what we’re talking about, and what we’re not talking about, we’d also like to mention another popular TV term: Connected TV (or CTV). CTV is also sometimes called Smart TV or OTT (over-the-top TV) and refers to watching TV content on an internet-enabled (connected) device within an app experience. So things like Sling, Samba, Roku or the Bravo app, the AMC app, etc. CTV does not require you to have a TV subscription (linear and addressable TV do) and the assets you use for CTV are the same VAST and VPAID tags you use for digital video (Linear and Addressable TV use the ISCI format). Connected TV is NOT a part of Programmatic TV.
How Do You Buy It
Now let’s talk about how buying ads on PTV works. The name alone insinuates this inventory is auction based - similar to digital programmatic. Wrong. Or that DSPs have TV inventory integrated into their platform for you to purchase. Also wrong. There are different types of PTV sellers – similar to the way there are different categories of inventory. We’ll talk about the three most common in the market today.
First let’s look at TV service providers who have recently gotten into the PTV business. Most notable in this category is AT&T who was a player here before, and certainly after, their acquisition of DirecTV. Every cable, satellite, or other TV service provider has access to 2 minutes of ad space for every 60 minutes of programming on the channels they carry. The way this inventory is packaged and sold is at the discretion of that provider. They could offer basic Linear targeting or, if they have internet-enabled STBs, they could also sell addressable targeting. Buying through a service provider can also be a way to get ad space during shows and time blocks that are normally sold-out through the networks. For example, getting your ad to run during Walking Dead or a prime-time sports broadcast. The catch here is that inventory is very limited (only 2 minutes of each hour) so it can be hard to scale.
Then there’s the TV “exchange”. This is a company, like an AdMore, that takes inventory from various sources – could be from service providers, networks, local affiliates, etc. – and pools it together to offer more scale. Again, depending on where the inventory came from and whether it’s Linear or Addressable will dictate the targeting you’re able to do. But the big benefit here is access to scale (because they've compiled the 2 min/hour inventory from multiple partners). Service providers and exchanges are the only PTV sellers that represent actual inventory.
Perhaps the most notable players in PTV are the DSPs – like a TubeMogul or Videology. Here it is easy to think that you are bidding on inventory or that the DSP has inventory on hand similar to digital channels, but not so for PTV. Currently a DSP for PTV is a very fancy order request system. The DSP allows you to build a campaign with your desired audiences, channels and other parameters. Once you have designed the campaign the DSP then goes out to a company like an AdMore, or an “exchange” to see if anyone has TV inventory to fulfill your request. For this reason you will notice that DSPs tell you PTV plans are not guaranteed (meaning, no guarantee you will get the exact plan you asked for, but they WILL let you know what they were able to secure and will guarantee you will run on a plan that you both agree to before the campaign starts). Essentially you can think of DSPs as providing a great order-request interface and campaign reporting dashboard. However finding the inventory and trafficking the assets for your campaign still happens outside of the DSP.
What Does It All Mean
Overall, there seems to be no truly “Programmatic” solution for TV at the moment. You can either have highly-targeted and incredibly limited impressions, or you can have scale buying the way traditional TV is bought and sold – against Nielsen audiences – for unsold or “remnant” TV inventory. But you can’t have both. Yet. In part 2 of this series we’ll be looking at the overall trajectory of PTV and how it’s eerily similar to the rise of Programmatic Display. Are we repeating the same mistakes or learning from the digital ecosystem? Until then – thanks for tuning in and good luck out there.