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Programmatic TV: What is It and Will You Like It?

Posted by Paul Jackson on 12/16/15 4:19 PM

In the ever-changing world of digital marketing, television has transformed leaps and bounds. Until recently, TV advertising depended on the traditional ratings system. That is, marketers would review TV ratings in order to determine the proper content and times for advertisements. This method hasn't changed much in nearly half a century. However, the advent of digital marketing has made TV programming (in some ways, at least) more adaptable and preferable to both consumers and marketers around the country and the world.

shutterstock_126796361.1.jpgWhat is Programmatic TV?

Programmatic TV is a method of advertising which relies on digital tools in determining the best way to produce and use marketing content. Instead of depending on "linear” TV schedules that broadcast programs on a set time and date, television marketers also have the option of dipping into the world of streaming TV, which is determined by the consumer and not the service provider. In other words, the consumer can watch a TV show whenever he or she wants.

Demographics such as age, gender, race, income level and general tastes are hard to trace with ratings—but they are much more transparent with programmatic TV. Television advertisers would love to learn what age groups watched The Mindy Show or Homeland, for example. If Homeland is primarily watched by 30- to 50-year-old males, for example, TV marketers would highlight certain products catered to them such as razor blades and hair-growth products. With programmatic TV advertising, marketers have an opportunity to target the right audiences down to a granular level.

The Disadvantages of Programmatic TV

Programmatic TV advertising has the potential to make it easier for TV producers, service providers and business owners to manage and market their products because it’s based on a granular data model that’s flexible and becoming more popular, but it’s definitely not without its faults:

  • Programmatic TV can be expensive. Programmatic TV is potentially more expensive than traditional TV advertising because it is more targeted. The detailed level of targeting requires more setup and analyzation—people need to physically plug in the specific targets by hand (because the placing of buys is pretty manual at this point).
  • A lot of networks aren’t using it yet. There is a fear right now that value of TV networks’ inventory will decrease and commoditize if they make anything programmatic public. This makes networks leery and therefore less likely to be early adopters of programmatic models.
  • Programmatic TV data may not be quality. How valid is the data? How recent is it?  Where is it coming from? Are you really hitting your targets? Even if you are, does that mean they are going to convert? People assume that if you target more you will convert more, that isn’t necessarily true. Why? The quality of the data might not be accurate.

Advertising on TV has always been tricky. Programmatic TV definitely has its advantages, but until it is picked up by more prominent networks, becomes more affordable and uses data that is verifiably accurate, traditional TV ad buying might be the more reliable option.  Don’t worry, though. If you’re not all that impressed with how current TV ad space is bought, that’s okay. Call Marketing Architects today and well tell how we do it differently and why you’re going to like it.

Topics: Direct Response TV, Direct Response Marketing

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