How Programmatic TV is Changing Ad Currency

Programmatic TV promises the automation of TV ad buying and a data-driven approach to TV campaign planning. The latter will help marketers optimise their cross-media campaigns in the new shape of engagement metrics – and ultimately drive sales, argues Andreas Schroeter, COO and co-founder at Wywy.

Automation presents many advantages from a buyer’s perspective, such as cost savings and faster turnarounds, and delivers incremental value. While many TV buyers can cope with the admittedly inefficient method of buying TV advertising today, automation will help players with smaller budgets enter the TV advertising arena. Automation also provides fluidity in the market for smaller TV networks as it allows advertisers to allocate smaller chunks of the overall budget to a wide range of networks.

The real advantage of TV automation lies in the data-driven approach it enables for planning campaigns. While most traditional TV campaigns are planned around gross rating points (GRPs) with the aim to reach the target audience at the best cost per point, programmatic TV goes a couple of steps further. The programmatic TV players have embraced more targeted audience data such as Rentrak’s – which collates data from millions of set-top box devices compared to Nielsen’s 10,000 household panel. This allows for more granular demographic targeting. Combining this with other data sources (such as interest data) makes targeting the right audience beyond demographics an easy task: If you want to reach 25-50 year-old women interested in losing weight, programmatic TV will make it easy for you to identify the right TV channels and programmes for your TV buy.

The improved audience currency: Secondary guarantees

An increasing amount of broadcasters now allow TV advertisers to buy on a ‘secondary guarantee’ level as opposed to a primary guarantee. This means that rather than solely looking at the primary guarantee (females aged 25 to 50 years) for the buy, advertisers can target using a secondary guarantee, such as females aged 25 to 50 years who want to lose weight. This has two distinct advantages: Broadcasters can achieve better yield management to get the maximum out of their inventory, while advertisers are better able to reach the relevant audience within the target demographic.

The new impact currency: Engagement metrics

With the rise of mobile, users’ TV viewing behavior has shifted fundamentally. Nielsen reports that 84% of viewers use their mobile, tablet or laptop in parallel to watching TV. Viewers are also quick to engage with something they have seen on TV and, according to a recent IAB study, 37% of viewers have previously researched a product advertised on TV and 31% have visited an advertiser’s website after watching a TV commercial. Mobile devices have made us act more quickly on impulse, engaging with brands in the heat-of-the-moment. Google calls these ‘micro moments’, and the TV ad can encourage this type of direct interaction.

The first forward-thinking brands and agencies have started tracking various engagement metrics alongside their TV ads. Using tweets as an indicator of word-of-mouth buzz, Google Trends as an indicator of search activity, and TV attributed web traffic to track online conversions such as purchases, marketers can consider an overall view on how its audience is reacting to the TV ads. This analysis is important for several reasons:

Contextual Timing
Firstly, the audience needs to be in the right mood for the ad. The contextual timing of the ad has a large influence on how receptive people are. For example, Sunday is often the most successful time to advertise diet products.

Knowing your audience
By reviewing the audience that directly interacted with its TV ad, brands can compare how the active audience differs from the planned audience. For example, an online delivery food service may find that primetime viewers who are about to eat are actually driving fewer conversions; rather than the couch potato TV viewers who watch TV in the afternoon. Although not obvious at first, the laziness factor becomes important when actually using an online delivery service.

Call to Action
Tracking consumer engagement allows brands to test the most effective call to action. For example, an ecommerce shop could test different product deals at the end of the commercial to draw viewers to its website to see which drives more conversions and website traffic.

So, while more granular audience targeting is the first step in the data-driven programmatic TV ad buy, the next step will be to measure this immediate engagement and use these impact metrics alongside traditional audience metrics. The automation part of programmatic TV will ensure that brands can continuously optimise their TV ad buy, driving high engagement with viewers who have real intent and interest in their product – which will ultimately boost ROI.