Programmatic TV Budgets To Rise From 4% To 17% By 2019
- by Tyler Loechner @mp_tyler, May 28, 2015
The programmatic marketplace continues to expand and mature, according to a new programmatic advertising report from IPG Mediabrands’ Magna Global.
As initially reported by Advertising Age, Magna predicts that programmatic TV -- which includes both audience-buying and household addressable -- will represent 4% of TV budgets in 2015 before climbing to 17% by 2019. Magna estimates that marketers will spend over $10 billion on programmatic TV by 2019, up from about $2.5 billion this year.
“While the majority [of programmatic TV spend] is audience-buying right now, household addressable is rapidly increasing and will become a significant portion of the total in the near future,” writes Magna in the report.
Magna defines TV audience-buying as the use of technology and audience data to deliver incremental reach, and defines household addressable as serving ads directly to the households in which the target audience resides. Both audience buying and household addressable are considering “programmatic TV” by Magna in the report.
Magna's programmatic TV "17% by 2019" forecast is not too different from the slightly more optimistic "20% by 2018" forecast offered by
research firm Strategy Analytics just over one year ago.
The report touches on several other topics as well, including programmatic’s “evolution” -- evidenced not just by its entrance into the television space, but also by the growing amount of quality inventory available for automated buying, which has in turn led to higher CPMs, theorizes Magna.
In 2014, programmatic CPMs for desktop banner ads increased by 23%, while mobile banner ad CPMs rose 8%. Video CPMs dropped 2%, however.
Magna predicts programmatic CPMs will continue to rise “as publishers grow more comfortable offering inventory programmatically,” and notes that as more brands jump on board, the rate at which CPMs rise will “accelerate.”
In Magna’s previous programmatic report -- released in September 2014 -- the company highlighted privacy and viewability as two chief concerns. However, Magna notes that “while it has only been six months since we last gave an update on these trends, both have seen signifiant steps forward.”
Magna points to some large ad tech players -- such as Google, AOL and Adobe -- “being more open with the way they’re using data,” and cites TubeMogul and Integral Ad Science reports that say viewability rates are up worldwide year-over-year.
As I understood it, the whole idea of "programmatic", as applied to digital, was that the computers scanned a myriad of "avails"---far more than any human could do---- in "real time" and found the most cost efficient way to accumulate target audience "impresions", selecting their delivery exactly when the advertiser desired. The Magna definition of TV programmatic buying seems rather far removed from this ideal, especially as it appears to blend local with national while the majority of the sellers as well as their "audience" inventory are not at play.
It seems to me that "TV programmatic" has been redefined to represent computer assisted, but not driven, buying, with humans making all of the actual decisions, which is a far cry from the "optimal" process that really obtains the maximum possible cost efficiencies on a totally "objective" basis. In short, it's not the same thing as the digital version and consequently, it's probably not a "revolutionary" process or a great leap forward.
Agreed, Ed. I think it's just another smokescreen from a bunch of people trying to make a lot of money off TV budgets without really delivering anything different. We've overseen one programmatic buy. Once we crawled through the hype, it was basically just big claims buy only buying local cable.
I remain skeptical there there is any advantage to come.