What You Really Need To Know About Programmatic Selling

by Jennifer Cooper

posted on 08-10-2015

Imagine attending an event for TV programmers and MVPDs. The presenter of a session about programmatic selling begins by posing a question to the live audience. He asks, “Raise your hand if you know enough about programmatic to be dangerous.” Half the people in the session raise their hands. This actual scenario played out at a recent industry event. It could easily be replicated anywhere TV programmers and MVPDs gather together because it uncovers a truth. The truth is that TV executives, including those responsible for ad revenue, don’t know enough about programmatic selling to be successful with it. It’s time to know more than “enough to be dangerous.” TV executives need to know what programmatic is, why it’s important, what makes it valuable and how it works.

Programmatic defined

Programmatic is any system that, through technology, facilitates transactions for ad inventory. TV programmers and MVPDs can use programmatic to sell ad inventory. Programmatic technology can be applied to something as simple as keeping rates and inventory available for specific media buyers, much like a credit card company holds concert seats for its customers. Or, it can be applied to something as complex as forecasting volume, reserving inventory and delivering video ads to the precise audience segments that media buyers want to reach, much like a manufacturer following a just-in-time inventory strategy gets the right parts to its customers at the right time. Programmatic also encompasses one of the most talked-about areas of ad tech — real-time bidding (RTB). With RTB individual ad impressions for sale are announced to buyers in real time, on an open exchange. For TV programmers and MVPDs, premium video inventory is in too high demand for real-time bidding to make up a significant share of programmatic transactions. Real-time bidding is just a small slice of the large and growing programmatic pie.

Programmatic demand fuels adoption

Buyer demand for programmatic is strong enough for TV programmers and MVPDs to validate implementing programmatic selling strategies. eMarketer reports that nearly 70 percent of UK and US marketers have moved TV ad budgets to programmatic video. It also estimates that this year, US programmatic digital video ad spending will soar 212 percent to $2.18 billion, which will make up 28 percent of total digital video ad spending. Since programmatic buying is fast becoming standard operating procedure for agency and in-house media teams, programmatic selling will need to become standard operating procedure for TV programmers and MVPDs.

Data gives programmatic its value

All the standard data that comes with a TV buy today, such as data about content proximity, age demographics, gender demographics and geography, will represent just a small fraction of the entire pool of data used to add value to programmatic video transactions in the near future. TV programmers and MVPDs who put data at the center of their programmatic selling strategy will be in the best position to fully optimize yield.

Data about viewers is going to be the key for TV programmers and MVPDs to connect the inventory they have to the specific audiences that advertisers truly want to reach. One advertiser may want to reach affluent people who have vacationed in the Caribbean in the last three years. Another advertiser may want to reach parents in households with school-age children. Access to detailed audience data empowers TV programmers and MVPDs to move away from offering content as a proxy for audience and going straight for the audience instead. Then, the ticket to maximizing yield is to reliably forecast, reserve and deliver highly segmented inventory for media buying clients. This provides media buyers with exactly what they need to generate business results, validate their spend and continue investing in premium video.

How to pursue programmatic selling

To get past the stage where internal teams know “enough to be dangerous” about programmatic, TV programmers and MVPDs need to adopt technology platforms designed for video advertising. The foundation of an effective programmatic selling strategy rests on two types of platforms: a data management platform (DMP) and a sell-side platform (SSP).

Teams that know “enough to be successful” about programmatic will avoid the trouble that comes with trying to make programmatic display advertising technology fit programmatic video advertising needs. Many of the SSP platforms on the market today got their start with display advertising, and they’re now trying to fit video into the display paradigm. The best SSP for TV programmers and MVPDs is a video-first SSP. Then, the best DMP for TV programmers and MVPDs is a DMP that can tightly integrate with the SSP, like Adobe Audience Manager. It ingests data and manages the audience segments that will be targeted with the SSP.

TV programmers and MVPDs should use their video-first SSP and integrated DMP anywhere there’s an opportunity to improve yield. Some of the most fruitful places to start include on inventory that ratings systems have difficulty reporting on, such as OTT inventory, and anywhere there are fractured pockets of valuable audience segments.

The right DMP and SSP will excel at identifying commonalities across all of the pockets of premium video inventory that a TV programmer or MVPD wants to sell programmatically. It will group the pockets into larger bundles that will reach a buyer’s most desired audience segment at scale. In short, the DMP and SSP should turn the chaos created by lots of data and inventory into meaningful packages that advertisers want to buy. When a TV programmer or MVPD can do that, they’ve definitely graduated out of the “enough to be dangerous” stage.

Topics: Advertising

Products: Audience Manager