• by Walt Horstman , April 9, 2015

As the TV upfront season begins in earnest this year, many agencies and their clients are asking central questions about programmatic TV. “How does programmatic TV fit into the upfront?”  Or, “Should a programmatic TV upfront exist? “ At first blush, the answers are “it doesn’t” and “no.” 

Programmatic TV is the marriage of TV audience data with tech automation to optimize a campaign in-flight. The attraction of programmatic TV stems from its agility and immediacy in TV planning and buying. Programmatic TV is at its best when optimizing campaigns on TV inventory this week, next week, or even next month; the upfront is about securing scarce inventory several months into the future.  Programmatic TV and the upfront therefore seem quite at odds.

But everyone is talking about TV audience data as they go into the upfront. Major media companies have announced adding audience data to their offerings. And agencies want to use the upfront to secure their clients’ desired audiences on TV. They want to lock in their coveted beauty products shoppers, not for next week, but for next year. Demand from agencies for more data-driven TV campaigns is now jump-starting the marriage of programmatic TV with the upfront.

It’s a challenging proposition. If we had the proverbial crystal ball, we could predict accurately today that heavy Sephora shoppers will be watching lots of FX Prime and even more E! Late Fringe in February of 2016. But audience viewership on TV, especially in today’s dynamic environment, is highly unpredictable. It’s challenging enough to predict total TV viewership of females 18-49 for February 2016, let alone what Sephora shoppers will be watching. No sophisticated algorithm or complex forecasting model can accurately predict what these coveted beauty products shoppers will be watching that far into the future.

Over the weekend I read an article on new ways of thinking about managing your 401K for retirement.  And the thesis struck me as quite applicable to the marriage of programmatic TV and the upfront. The writer argued that retirement planning has been fixated for years on trying to make accurate predictions of the future with a few key static numbers.

1.     How much money will you need for retirement?

2.     At what age do you plan to retire?

3.     What do you think will be the average annual return of your portfolio?

These three numbers can be plugged into a simple financial model to determine your annual savings rate. Put away that money into your 401K each year and you’ll achieve your ultimate goal: financial security in retirement. 

Then the author argued that most people’s lives and financial goals are not static. Financial requirements and expectations can and do take many turns. Careers go through peaks and troughs.  What people want during retirement and when they want to retire can change significantly over the course of a life. Consequently, the goal of retirement planning should be to achieve an accurate planning process, not an accurate forecast. Recalibrating one’s retirement financial model each year based on changing goals and circumstances is more important than reaching a set target 30 years into the future.

Programmatic TV and the upfront come together not as a method to accurately forecast where Sephora shoppers will be watching in the future; they come together as a structured process of planning, calibrating and adapting based on new data as it comes in. What does this mean for agencies and their clients? A programmatic TV plan can be developed today for February 2016 based on today’s information. But as we go through this year and into next, that plan will change and adapt as it follows the audience’s viewing. It will very likely look different when it ultimately goes into execution.  Bravo Daytime may rise from the middle of the plan to the top.  Some networks and dayparts may newly appear, while others may even fall off. The key is to anticipate that change is inevitable, and that the journey is more important than the destination.