January 25, 2023
Commentary
Why the Traditional TV Buyer Will Never Use Programmatic TV
- by Andreas Schroeter , Op-Ed Contributor, August 20, 2015
With everyone predicting the rise of programmatic TV, the current challenge is to get established TV buyers with big budgets to start buying on the programmatic TV platforms.
As Terry Kawaja from Luma Partners points out, the traditional TV buyer is 55 years old and has planned his TV buy ever since he started his career 30 years ago, based on demos and gross rating points.
There is absolutely no incentive for him to change his behavior, and here's why:
1. No understanding
Imagine having planned your campaign the same way for 30+ years. Now, advanced targeting options emerge, e.g. overlaying audience with intent data.
The TV buy will be compared to the digital video buy, needing you to understand digital metrics, such as completion rate, click-through rate, and conversions.
The programmatic buying process opens up more opportunities, such as auction-based buys and rule-based buys. That's quite a lot to learn. So many platforms have made the buy easy by using known metrics, letting users choose age, gender, a predefined CPM, the channels and dayparts they want to run.
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It essentially mirrors what they are used to -- but falling short on the advanced programmatic options.
2. No upside
If you are doing the same TV buy, but just through a different buying platform, what's the upside?
To create real upside for your client, you need to dig deeper into the advanced capabilities, which you need to understand. Your clients' expectations have been the same for the last 30 years, so keep on doing the same thing, right? If trying something new doesn't work, the client won't be happy.
If trying something new yields more or less the same results, you don't have time for it. And if it does work, you still need to convince the client of its benefits.
3. Client Reporting
If your programmatic TV campaign is successful, you need to be able to effectively report this information to your clients. Reporting unknown metrics to them means you’ll need to explain.
Again, many programmatic platforms have anticipated this and incorporate known metrics, such as the GRP, into their reporting, boiling the campaign success down to a more efficient cost per point buy. Although this can easily be explained to the client, it falls short on all the capabilities programmatic TV really has.
Here's an example: Try explaining to your client that while the GRP on the programmatic campaign compared to the traditional TV campaign is higher, you reached your target audience much better. The incorporated intent data reduced the real target audience to 20% of your initial demographic target audience.
As brand awareness cannot be measured instantly, the client only has your word that the higher cost per point is justified.
To put it bluntly: As a traditional TV buyer, you need to relearn everything you know, with limited upside from your perspective, and then convince the client of something you are not convinced of yourself.
While there will be traditional TV buyers moving to programmatic, I personally believe this is the wrong approach for the programmatic TV industry.
Instead of trying to build a bridge, we should focus on the new TV buyers out there, either emerging from 'digital marketing first' startups who move into TV advertising and expect the same metrics as online or, those coming out of the DRTV world, who embrace the new technology as the next step in direct response advertising.
To use a metaphor: There are still people selling magazine ads, then there are people selling online ads and then there are people selling online ads programmatically. So let's focus on the online video buyers, the programmatic display buyers and the DRTV buyers instead.11 comments about "Why the Traditional TV Buyer Will Never Use Programmatic TV".
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Don't forget the young, much smarter and adaptable video ad sellers, Andreas. You are going to have to replace those hide bound---not very smart--- old folks who handle the sales for the TV networks, cable channels and the syndicators as well. Perhaps the young digital video selling fraternity, with its proven trackrecord of delivering viewable ads at bargain basement prices to exactly those consumers that advertisers want, can insinuate itself into "legacy" TV sales channels-- operating as "moles' or an organized "fifth column" ---so when the new breed of buyers emerges they will be met by a new breed of sellers and all will link arms and happily hop and skip down the yellow brick programmatic road which, as we know, leads us to the great wizzard. Sounds like a great plan to me.
Well said Ed. Andrea, remove the head set and walk away from your computer, there's a real world out there. And while you're at it, we can all live with less of the hackneyed/cliched expressions that seem to be the flavor of the month. Folks like Ed and myself understand process, not just "flicking and clicking" to end up with some pre-conceived idea of ideal measurement, demos, etc.
Perhaps, if you ask nicely Ed will share his real and extensive knowledge with you and explain how the business has continued to grow and emerge, regardless of platform, channel, etc.
Ed,
Thanks for your comment. My post was not aimed at suggesting that the "young digital video selling fraternity" is smarter than the "old TV buyers" - if you perceived it that way I am sorry.
My point was that there are folks out there that already believe in programmatic buying because they are using it every day for their display and video ads. We should focus on getting these people onboard for Programmatic TV and not try to convince people who are sceptical about it.
The TV industry is not going to change overnight (I think/hope we both agree on that) and there is plenty of room for buying TV ads the "tradtional way" and the "programmatic way". After all, it took about a decade for programmatic online advertising to reach 50% of the online ad sales.
Programmatic does not work yet with TV buyers because no seller of TV ad inventory wants Transparency in a bidding process.
The Technology would be extremely efficient for buyers but sellers do not want to post supply/demand pricing for all to view.
They have Fear.
So siloing prices will continue for a while until Technology breaks the dam.
What say you Ed?
Andreas, I did take it that way, however, I'm glad that this was not your intent.
As for programmatic buying for TV, as it happens, I do see areas where it can fit in, primarily when there is little to differentiate one seller's wares from another demographically or in cases where the seller does not have a national sales presence or his audience is so small that the standard rating service---Nielsen---will not provide data defining it on a show by show basis.
For example, I believe that national advertisers and their media shops would be positively inclined towards some form of automation for spot TV buys, providing that the stations and/or their reps understood that they had to adopt a firm audience guarantee system and agreed to sell spots in specific telecasts---without abritrary last minute pre-emptions. I can also see a programmatic buying pool of low rated cable channels going the fixed rate card route, creating an option which advertisers----especially smaller budget ones--- can dip into as needed. Also,so-called "distressed merchandise", often the result of last minute cancellations, might qualify for its own pool, including even the major sellers. All together, such buying might account for 20-30% of national TV buys---eventually. However, I don't see it going much beyond that for many reasons which have been discussed repeatedly. The stakes for the sellers are simply too great for them to give up control of their "premium" GRP inventory. By "premium" I mean primetime, news, sports, specials and late night prior to 1AM. Also included would be early AM bellweathers like "Today" and "Good Morning America" as well as some of the daytime fare, though here we are dealing with GRPs as more of a commodity. Prime Access syndication might also qualify as "premium" along with some other cable and syndication genres.
Leonard, basically, I agree with you, though it's not so much a case of the seller's fear of transparency but, rather, the need to control the negotiating process and maximize total ad dollar yield.
As I indicated in my post, above, I believe that certain types of TV are more amenable to programmatic buying than others. This is chiefly because they are not content/image/merchandising-driven, but merely audience tonnage /CPM driven. In other words, if almost all TV station early news shows reach the same kinds of people---mostly older----hence, there is little to choose between them regarding targeting, they become commodities. Under such conditions, programmatic is an ideal way to cut the tedious and redundant effort to make these buys and service them afterwards. The same is true for "long tail" cable channels which Nielsen can't report on in per-telecast detail. Here, it's not just a question of low CPMs, as some of the programming can be very selective targeting-wise. But, in terms of critical mass, such buys are secondary add-ons for most major advertisers, therefore egos are not at stake, nor are overall CPMs at risk, so it's OK to use the programmatic approach to make buying more efficient and, in some cases, to unearth unique opportunities that might lost in the shuffle.
Andreas I am glad you mentioned in a comment that the TV buying process will not be changing immediately but I have to say that your choice in wording and descriptions about media buyers is a little unsettling and borderline ageism! I am sure there are plenty of skilled media people across many age groups that are interested in incorporating programmatic buying as necessary and I don't believe it is solely the domain of the young. Also it it is not always up to the media person, media sellers, and clients also have a say so let's not blame only the”traditional TV buyer who is 55 years old and has planned his (or her?) TV buy ever since he or she started their career 30 years ago, based on demos and gross rating points).
Andreas, you think the TV business will not change overnight? I disagree. While it's true the programmatic platform is no panacea for the industry, its not the only innovation out there. One day those 55 year old TV buyers with their old fashioned CPMs and GRPs, and their 25 year old counterparts, with their shiny new programmatic data sets are all going to wake up with voicemails from marketers demanding guaranteed sales increases for every product advertised on television. Then what do you suppose will happen? While some here wilk say, "keep dreaming", others say, revolution!
I'm fascinated at the mass of people who've jumped onto the programmatic TV bandwagon just as it's becoming exceptionally clear that these types of ad networks lead to fraud.
Traditional ad buyers are wise to distrust the programatic black box that claims to deliver "laser targeted" eyeballs. And, we should learn from digital marketing.
The advent of online "laser targeting" has led to lower and lower CPM's. Which is the OPPOSITE of what would happen if that targeting was effective. Effective targeting would demand a premium price.
And so, I advice extraoridinary caution. Because some day 2 or 3 years hence, we'll see that MediaPost article extolling the wisdom of the traditional buyers who refused to jump on this flakey bandwagon.
Goodness me. All this time I thought we were talkingabout Problematic Buying.
It used to be that media buyers were seen as "crosses in boxes tickers". Now they are seen as "putting in the parameters" into a Programmatic system. Neither are true reflections.
Well, what u think as a real problem more than the mindset and transparency is the operational feasibility. Programmatic leads to creation of private exchanges with each not having more than 2-3 networks on board. Broadcasters never would want to hook up their open available inventory with DSPs controlled by these prove exchange providers (mostly technology companies like Google). Better broadcasters get their technology (DW/BI) upgraded rather than relying on the technologists to run their business
Programmatic is well suited for online as the entire ad supply chain had the scope for digitization and automation from ad conceptualization till delivery (Mostly those ads are sliced and diced versions of the final TV ad). For TV, the ad supply chain can't be automated as it requires manual intervention to conceptualize, editorials, S&P, rotations etc which happens at different places by different people and cannot be instant as demanded by Programmatic.