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Programmatic TV Advertising The Rise of Programmatic TV

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Page 1: Programmatic TV Advertising - Trifecta Researchtrifectaresearch.com/.../2015/09/Programmatic-TV-Advertising-Sample...Programmatic TV Advertising Table of Contents Trifecta Research

Programmatic TV AdvertisingThe Rise of Programmatic TV

Page 2: Programmatic TV Advertising - Trifecta Researchtrifectaresearch.com/.../2015/09/Programmatic-TV-Advertising-Sample...Programmatic TV Advertising Table of Contents Trifecta Research

Programmatic TV AdvertisingTable of Contents

2Trifecta Research 2015 | Privileged and Confidential

1 Definition Programmatic is not universally defined

2 Programmatic Advertising Revenue (TV) Programmatic TV to reach $10 billion

3 Programmatic TV for Advertisers and Broadcasters The potential of programmatic TV for brand advertisers Programmatic makes sense for TV programmers and broadcasters

4 Adoption of Programmatic TV Buyer and seller adoption

5 Examples of Programmatic TV Broadcasters and large networks are already experimenting

6 Case Study - Oreo First Super Bowl ad to be purchased programmatically

7 Future of Programmatic TV What’s next?

Page 3: Programmatic TV Advertising - Trifecta Researchtrifectaresearch.com/.../2015/09/Programmatic-TV-Advertising-Sample...Programmatic TV Advertising Table of Contents Trifecta Research

IAB defines programmatic as “machine based buying and selling of digital media, including auction basedmethods like RTB and private marketplaces, as well as the automation of direct sales, sometimes calledprogrammatic direct.”

Programmatic TV is still in its infancy and its definition is varied:

Programmatic TV is the technology-based empowerment of the planning, buying, measurement andoptimization disciplines of traditional television.

An automated, technology-driven method of buying and selling linear TV ads, both broadcast and cable, ortimeshifted TV recorded on a DVR.

For ad agencies and other media buyers, this means the opportunity to target audiences with greateraccuracy, holistically manage buys across platforms and drive stronger results.

DefinitionProgrammatic is not universally defined

Programmatic buying of both linear and addressable TV advertising is nowhere near the level of use and

sophistication in the digital space. However, the audience-targeting capabilities of programmatic are of intense interest

to TV ad buyers.- eMarketer

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Programmatic TV - in this case defined as all spending transacted through a technology platform rather thana traditional insertion order - will represent 4% and $2.5 billion of U.S. TV budgets in 2015.

Programmatic Advertising Revenue (TV)Programmatic TV to reach $10 billion

That will increase to 17% and $10 billion of TV budgets by2019.

While the U.S. programmatic TV market, where most ofthe experimentation and development is happening, isstill very small (2-3% of TV budgets in 2014), it isexpanding.

Programmatic TV can be broken down into twocategories: audience buying, which represents themajority of programmatic TV and "householdaddressable."• The household addressable method of programmatic TV

buying is a way to target demographics via local buys servedthrough cable operators' set-top boxes.

• Audience buying is more broad: It's focused on targetingspecific consumers using audience data wherever thoseconsumers may be watching TV. It's not necessarilydependent on serving ads through set top boxes.

Page 5: Programmatic TV Advertising - Trifecta Researchtrifectaresearch.com/.../2015/09/Programmatic-TV-Advertising-Sample...Programmatic TV Advertising Table of Contents Trifecta Research

Programmatic TV for Advertisers

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The potential of programmatic TV for brand advertisers

Trifecta Research 2015 | Privileged and Confidential

Page 6: Programmatic TV Advertising - Trifecta Researchtrifectaresearch.com/.../2015/09/Programmatic-TV-Advertising-Sample...Programmatic TV Advertising Table of Contents Trifecta Research

Programmatic TV for Broadcasters

6Trifecta Research 2015 | Privileged and Confidential

Programmatic makes sense for TV programmers and broadcasters

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Adoption of Programmatic TV

7Trifecta Research 2015 | Privileged and Confidential

Buyer and seller adoption

Companies using programmatic to procure TV advertising are in the minority:

A June 2014 survey from AOL Platforms found just 8% of US respondents used programmatic for TV adbuying.

An additional March 2014 poll from the Association of National Advertisers (ANA) and Forrester Consultingreported a similar number for US client-side advertisers: 13%.

Participation might be low, but interest is high, especially for those aiming to tie their programmatic TV buys inwith their digital video.

Page 8: Programmatic TV Advertising - Trifecta Researchtrifectaresearch.com/.../2015/09/Programmatic-TV-Advertising-Sample...Programmatic TV Advertising Table of Contents Trifecta Research

Examples of Programmatic TV

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Broadcasters and large networks are already experimenting

Trifecta Research 2015 | Privileged and Confidential

Page 9: Programmatic TV Advertising - Trifecta Researchtrifectaresearch.com/.../2015/09/Programmatic-TV-Advertising-Sample...Programmatic TV Advertising Table of Contents Trifecta Research

Case Study – Oreo

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First Super Bowl ad to be purchased programmatically

Trifecta Research 2015 | Privileged and Confidential

A week before the 2015 Super Bowl, a premiumadvertising spot came up for grabs in Erie, Pennsylvania(100,000 people) and Mondelez grabbed theopportunity.

The company bought the ad programmatically,making Oreo the first brand in the world to air an adthat was targeted through software via programmaticTV (PTV).

From campaign ideation to delivery took just oneweek, shaving at least two months off the standardlength-of-time required to book and air an ad.

The company would not say how much it cost to runthe ads compared to others.

The benefits of programmatic TV is that the advertiser gets analysis of those views within 24 hours.

Following the ad buy, Laura Henderson, associate director of media and communications at Mondelez toldAdWeek that the purchase of the Oreo ad “is just a glimpse of the future of automated TV ad buying.”

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Future of Programmatic TV

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What’s next?

Trifecta Research 2015 | Privileged and Confidential

Current solutions are fragmented and piecemeal, and long-established processes and business practices mayslow the transition.

Despite all the audience fragmentation, TV remains the best medium to reach large audiences through thepower of sight, sound and motion – delivering more concentrated volume than any other video channel canmatch today.

Programmatic offers the opportunity not only to adapt to a changing viewing ecosystem, but also to takeadvantage of data and automation to optimize yield in ways never before available.

TV is going programmatic. Programmatic technology will surface inventory value at a more discrete level than ever

before—and both buyers and sellers win.- comScore

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