Connor Dault

Associate Manager, Global Partnerships

State of Television: Progression Into Programmatic

According to Nielsen, there are over 115 million U.S. homes with television sets. With a projection to spend over $70 billion this year, television advertising continues to attract dollars from brands because of its massive reach. While the consumption and delivery have evolved significantly over time (over-the-air broadcasting, analog cable and satellite TV, digital, and, most recently, internet streaming), TV advertising has not matched those advancements. Below, we explore traditional TV advertising and how marketers can evolve with programmatic to better reach their target audiences.

Traditional Buying Methods

A traditional TV buying process typically includes an advertiser and Nielsen, with an agency serving as the liaison between the two. An advertiser first defines its target audience, and its agency asks Nielsen for a recommended list of programs and time of day to reach that audience according to a Gross Ratings Point (GRP) goal. Then, using this information, the agency creates a media plan and works with the networks and providers to air the commercial. Afterward, the agency shares GRP and impression data results with the advertiser. While these steps seem straightforward, the manual and time-consuming nature of the buying process can make it challenging to secure inventory quickly and adjust campaigns in a timely manner.

The GRP system provides advertisers with information on the reach of their target audience and guides targeting. GRPs have been the gold standard for planning, purchasing, and measuring in television for over 50 years, but there are two large inefficiencies with traditional buying methods:

  • Limited Targeting: An advertiser is limited to targeting an audience by only age and gender. Since TV inventory is expensive and targeting options are limited, spending on inventory that does not successfully reach in-target users is wasteful and costly.

  • Manual Process: The time required to manually plan, traffic (i.e. set up), report data, and communicate about billing increases exponentially as the number of networks and platforms continue to grow. This manual process means it takes a while to adjust a campaign, so there is no option for mid-campaign optimization.

While TV advertising is a powerful piece to a strong marketing campaign, these inefficiencies have presented an opportunity to improve upon the powerful platform through programmatic elements of digital marketing.

Automation Opportunities With Programmatic TV

Programmatic TV (PTV) is the use of data and automated processes to more precisely target specific consumer audiences and increase media spend efficiency. PTV keeps the innate strengths of traditional TV advertising: It retains 100 percent share of voice (SOV), which means a company doesn’t share screen time with other advertisers like it would with online ads. It also reaches audiences at the same large scale, while incorporating data-driven targeting and process automation. PTV not only retains these innate strengths of traditional TV, but also enhances it with the following improvements:

  • More Targeting Capabilities: Advertisers can specify a target audience beyond age and gender with first and third party data segments. For example, marketers can use it to target an audience as specific as males aged 18-34, who have recently purchased a car and are sports enthusiasts.

  • Closing The Loop: Addressable TV is a form of PTV and allows for television buying against a household. If a marketer has a list of consumers who have submitted requests for information, but haven’t transacted, addressable TV can serve commercials with various product promotions to these specific households. The loop is closed when the marketer then measures how many of those messaged households completed a transaction with the brand.

  • Lower Barrier To Enter TV: TV buying has traditionally had strong barriers to entry from both a cost perspective and network relationship perspective. It’s a huge undertaking to ensure efficient spend for a large TV budget and new advertisers must develop processes to purchase inventory across desired networks. With data-enabled targeting through PTV, the cost barrier to entry is lower, and advertisers will have a data map to use their ad dollars effectively.

Overall, incorporating PTV creates a simplified process with the same access to premium, broadcast, national, and local inventory that traditional TV allows. With PTV, you have additional options to buy across connected device content and video-on-demand content.

What Does PTV Mean for the Future of TV?

Our programmatic solution, the Rise Trading Desk, originally purchased display, video, mobile, and native ad inventory, but has since built a robust solution for TV as well. The Rise Trading Desk uses programmatic elements to purchase TV ad content across all devices including Linear TV set-top boxes, connected devices, desktops, and mobile phones. Current relationships span across multiple demand-side platforms (DSPs), multichannel video programming distributors (MVPDs), data providers, and networks to ensure Rise can fully execute TV buys by leveraging premier inventory and data capabilities.

For marketers, it’s important to take a similar approach in leveraging data and automation to help reach the portion of the target audience missed by current TV efforts.

Current TV buyers can enhance an existing strategy by implementing PTV. Conversely, advertisers who have never aired a TV commercial can benefit from the efficiencies of PTV as a means to get their brand on TV for the first time. By using both, advertisers add to the 100 percent SOV and large-scale reach from traditional TV with PTV’s more detailed targeting capabilities, closed loop, and lowered barriers to entry.

To learn more about Rise's programmatic TV capabilities and how it can transform your current efforts, reach out to Rise.


09/12/2016 at 03:13

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