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Direct Response Marketing

Programmatic Proliferation

1 Dec, 2014 By: Doug McPherson Response

It’s next to impossible to read any advertising industry publication today and not see the word: programmatic. It’s the buzzword of choice right now and for good reason — many say it stands to revolutionize TV media buying.


What is “programmatic”? What does it mean to you? What impact might it have on direct response? And what challenges and opportunities await in the programmatic world?

To answer those questions and more, Response Magazine assembled a group of experts to shed light — and some revealing answers — about programmatic:

  • Dan Ackerman, senior vice president of programmatic at Adap.tv, a video advertising platform company, headquartered in San Mateo, Calif.
  • Jason Baron, senior vice president of direct response for Turner Ad Sales, a division of Turner Broadcasting in New York.
  • Brendan Condon, CEO of REVShare, a TV ad network that brings the accountability of Internet advertising to TV, in Temecula, Calif.
  • Michael O’Connor, senior vice president of direct marketing activation at Horizon Media, a media services agency with offices in New York, Los Angeles and Chicago.

Programmatic has become a huge buzzword because of its success in digital media buying circles. When considering television media, what does the word “programmatic” bring to mind for you today?

Dan Ackerman: The industry is rapidly innovating in targeting, optimization and attribution. For example, our platform uses sophisticated algorithms to activate customer relationship management data and third-party data to predict audience viewing, engagement, response and purchase behavior. As for workflow automation, this is developing slower as legacy systems still predominate. It’ll take time to develop the connectivity between buy- and sell-side systems to enable true machine-to-machine automation. As those pipes are activated, programmatic will help eradicate the inefficiencies in the TV ecosystem and unlock greater yield for media sellers and impact for advertisers. 

Jason Baron: Programmatic is a new way to find audiences through automated efficiencies, leveraging data for improved insights and targeting capabilities. Brands are interested in improving efficiencies across television buying, similarly to how they have used programmatic buying for digital platforms.

Brendan Condon: Programmatic TV buying is an automated process that allows clients and buyers to easily target audiences across multiple content outlets. Traditional television buying relies on monitored ratings, whereas automated buying relies on measured audience data to target a potential customer. So instead of manually placing your campaign across, network by network, to reach your customer, automated buying empowers marketers to place a comprehensive audience profile — say, men 18-34, living in blue states — across a myriad of networks, using a single insertion order generated from one automated platform.

Michael O’Connor: Programmatic is the automation of the buying process with the infusion of data to drive decisions. That process may look different for TV and digital, but the fundamental premise is consistent across the two. 

Many are saying that programmatic will be a sea change for the way TV media buying and selling is done. Do you agree or disagree and why?

Ackerman: Programmatic will have a material impact on the way TV is bought and sold. Many have been saying that it would take a decade or more, but over the next three years, we will see a significant shift in spend to programmatic channels as there is a need from everyone to be able to more efficiently transact against audiences, on TV and off. Today, there’s certainly much more experimentation happening, with positive initial results, and that will grow into an increased investment by both buyers and sellers of TV as the economics become clearer.

Baron: It will cause a shift in process, but only as one part of an overall media campaign. There are still many components that will remain.

Condon: Quoting the always-quotable New York Times media columnist David Carr: “Change comes very slowly, but then happens all at once.” To that end, we are starting to see a shift in traditional TV buying cycles like the upfront and scatter market that portends a significant transition in their importance and relevance. It will take several years for automation to become a truly integral part-and-parcel of the TV buying landscape, but when it does, it will accelerate rapidly.

O’Connor: As buyers and planners, we have access to so much more information surrounding the consumer and programming than we’ve had in the past — set-top box data, Experian, etc. As we get more advanced in how we automate and utilize that information, we’re improving the buying process. There is huge opportunity to automate the process between the buyer and seller. There is still so much data entry involved in TV, and as an industry we should be pushing to automate as much as possible. I don’t see a big shift to one-to-one messaging through auction-based buying similar to digital. The services like Simulmedia, Audience Express and AT&T’s TV Blueprint will likely gain some more traction, but I see those as complements to a buy. I think the real opportunity is automating and improving the way we use all the big data we have available across buying, planning — and ultimately sales.

A number of recent studies have shown that programmatic TV buying is expected to grow extensively in the next two to three years? Do you believe this will be the case and what is your business doing to respond to this possible shift?

Ackerman: Yes, 60 percent of the respondents to our fifth annual State of the Video Industry report [released this fall] stated they would use programmatic techniques to buy TV in 2015. And predictions by ad buyers are quite bullish: execs during Advertising Week in New York said anywhere from 5 percent to 10 percent of TV will be bought through programmatic means in a couple of years. That may seem like a small percentage, but that represents billions of dollars. We’re deploying technology to enable data-driven decisions for planning buying, optimization and attribution for all TV inventory across the entire media landscape. This will be a key part of ONE by AOL, which is being built to be the first platform that empowers brands and agencies with a holistic view of the consumer’s journey through the marketing funnel, and makes that insight actionable in real-time.

Baron: In many cases, the pipes have yet to be built for programmatic TV. Local executions are underway, but from a national perspective, we have quite a road ahead of us.

Condon: Yes, programmatic will grow extensively and that’s why we launched our automated, or programmatic, TV ad buying platform AdMore™ in July 2013. We wanted to be ahead of the curve, just like when we launched REVShare, our cost-per-action buying platform, more than 20 years ago. Based on proprietary asset distribution technology, extensive supply of occurrence-based data, and expansive media relationships, we created AdMore to offer brand marketers a turnkey, automated TV advertising model that’s effective, accountable and scalable. Agency trading desks and brand marketers are already using AdMore to complement their traditional TV buying, and we anticipate double-digit growth for the platform in 2015.

O’Connor: Advertisers and agencies are moving away from buying a demographic and toward buying an audience. This will be more pronounced as technology improves so we can better utilize all the information we have access to. At Horizon, we’ve been using advanced targeting tools for a few years now and are working on a tool that will automate various data streams as well as the flow of information between buying and selling and ultimately optimize based on results.

What advantages do those who have worked in the direct response, paid-programming and per-inquiry businesses have over traditional TV media buyers and sellers when it comes to understanding programmatic and how to maximize its effectiveness for marketer clients? 

Ackerman: Any advertiser, agency or media seller that’s leveraging customer data, engagement and response data, attribution technology, and automation are well placed to succeed in programmatic TV. Obviously, those in direct response have a distinct understanding of programmatic and its ability to directly affect sales, but we are seeing brand advertisers and traditional TV sellers really understanding, and pushing, for more granular views of their investments.

Baron: Direct response sales teams are well suited to navigate programmatic. At its core, direct response is an efficiency play, reliant on demonstrable return on investment for clients. This is similar to how programmatic demands analytics to prove efficiency.

Condon: People in the DR industry have always been data-driven and had high expectations for their campaigns delivering results in a readily measurable way. Their media buys are always performance-based — with consumer engagements occurring on a real-time basis. This is something that DRTV executives have championed, and programmatic TV buying platforms have analytically-backed solutions that are specific for their type of TV ad buying efforts.

O’Connor: Direct response buying basically is programmatic. We purchase inventory from networks and optimize in real time, based on various results. Direct response buyers are already accustomed to the analytics end of programmatic and have developed that skill set. It’s really about improving the tools and information they have at their disposal. The biggest difference I see moving forward is the quality of data and information we can utilize to make decisions and the automation of that process.

When it comes to programmatic TV media buying, what challenges do marketers and their agencies need to know about today?

Ackerman: Programmatic is about driving efficiency and impact, and while this conversation is focused around the TV space, what keeps marketers up at night is how they can effectively execute across all of their marketing channels. That means TV, but also digital, mobile, and so on — and across display, video and other formats. That is a tremendous amount of complexity. Having a really strong and committed technology partner is key for marketers to be able to capture the full value of their cross-screen investments. This segues into data, specifically being able to unify all of the disparate sources of data that marketers deal with. The technology is only as good as the data that’s fed into it, allowing platforms to uncover the actionable insights marketers need. Lastly, while this industry is fast moving, it behooves all ad buyers to, at the very least, begin to dip their toes into programmatic TV. This will allow them to stay ahead of the programmatic curve as it continues to evolve.

Baron: For marketers and agencies, it’s really about quality inventory, transparency, trusted measurement and foundational data.

Condon: The primary challenge for marketers is the willingness to embrace the changes brought about by automation and demand it from their media agencies. They need to familiarize themselves with the landscape now. A second challenge is choosing a platform that makes your media buy measurable and accountable — and the results immediately transparent and actionable. If there’s too much heavy lifting, then it’s not automated. Another challenge is more of a recommendation, and that is to use a platform that’s scalable and participates in both the supply and demand sides of the programmatic TV offering.

O’Connor: The biggest challenge to programmatic TV buying in today’s world is scale. The way networks deliver and sell programming is not on a one-to-one basis the way digital is. The networks control the inventory and the multichannel video program distributors control the delivery pipeline. The services offering programmatic solutions use various data sources and algorithms, but ultimately they don’t have direct access to the network’s inventory, so they’re forced to cobble together the remnant inventory — heavily in local cable avails — to build out a national footprint.

When it comes to programmatic TV media buying, what opportunities should marketers and their agencies know about today?

Ackerman: The challenges are also the opportunities. Marketers should understand the value of their data as currency. They can activate first-party customer data to increase targeting accuracy and improve impact on return on investment. That means doing it not just for TV spend, but also across other channels on which they advertise. There is amazing technology being developed to mechanize the TV buying and selling ecosystem; marketers and agencies gain a huge first-mover advantage by experimenting with them now, as the shift to programmatic TV is inevitable.

Baron: It’s still early, but the opportunity is there to learn, leverage data assets and establish a feedback loop to continually improve.

Condon: Automated TV buying allows agencies and brands to focus on other important parts of the consumer engagement process, including branding, storytelling, retail, activation and custom solutions. Programmatic TV buying offers clients, agencies, their trading desks and media partners a simpler, smarter and more efficient way to reach a targeted audience. Lastly, AdMore is a fully automated TV buying platform that’s here today with proven successes across the board. We see that as a tremendous opportunity.

O’Connor: Automated, data-driven buying can deliver better targeting, more efficiency and a more streamlined process. The more we can streamline various data sources the more clearly we can hone in on our target consumer, which is increasingly important as viewership gets more and more fragmented across networks, both linear and digital. This will enable us to uncover target-rich environments we might not find through traditional metrics. From a buying process perspective, the more we can automate and eliminate time-consuming data entry, the more energy can be spent on analytics and making smart decisions to drive clients’ business on both sides of the equation. ■


About the Author: Doug McPherson


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