Programmatic Not A Dirty Word Anymore

About seven-and-a-half years ago, Bill Wise predicted to the TVB’s Abby Auerbach that 100% of all spot sales would be conducted via automated selling systems. Auerbach, who is the organization’s EVP and chief communications officer, told him she wouldn’t put him in front of a TVB audience. The idea of automated selling on that kind of scale was just too wild, and a bit scary, for broadcasters at that time.

Flash forward to today, and Wise, the CEO of Mediaocean, was reliving the moment with a laugh at the TVB’s Forward conference — and admitting how far from reality that prediction has come to be, so far.

But like other panelists that took part in the session on advanced and automated local TV ad sales, Wise remains confident that the automated business is going to catch hold in a much bigger way. “I think the goal should be 100%,” he said.

Stations are certainly ready to hear what Wise has to say now, but they think the reality of where automated selling can go is much different than what he believes. A recent poll of TVB members showed that 24% of those surveyed believed that a mere 5% to 10% of national spot will eventually be sold programmatically. And 21% of those surveyed thought that it would be 20% or more.

Shereta Williams, president of Videa, doesn’t go so far as to say it will be 100%, but she believes it will be much more than what the TVB poll suggests.

Williams noted that advertisers and their agencies are attracted to automated platforms because of the data analysis features that allow them to get better value from their buys. “I think we’ll access dollars we haven’t even [imagined] today,” she said.

Progress is definitely being made, slow as it may be. The industry, and Videa, are transitioning from an experimental phase to one that’s fully operational, Williams said.

“A few years ago, ‘programmatic’ was almost a bad word. People were nervous … that it would disintermediate jobs,” Wise added. He and everyone else on the panel stressed that sales teams won’t get smaller, but the skill sets of sellers will change. 

“Legacy systems aren’t going away,” predicted Lorne Brown, CEO of SintecMedia. However, they are going to require a big clean-up so that the spot buying process is much easier, he explained.

“The task for broadcast stations and the companies that serve them is about how to build a framework on top of legacy systems” so that the process of buying spot television is much easier than it is today, Brown said.

He pointed out NBCUniversal’s recent deal with Target, allowing the retailer to buy ads on the network group’s top-rated shows by plugging directly into NBCU’s inventory via an application programming interface (API). That’s the kind of “opportunistic” play that will make advanced selling catch fire, Brown said.

Eric Matthewson, CEO of WideOrbit, said that national networks are only “slightly ahead” of local TV with automated systems. “It’s not that dramatic.” But the ease of transaction and advanced data needs to get better in order to lift the value of automated spot transactions.

Mathewson noted that companies with automated systems, like his own, are spending tens of millions of dollars in developing their platforms, without cost to broadcasters. (Although it should be noted that Videa is owned by Cox, and is a kissing cousin to the company’s TV station group.) To push the broadcast industry even further, WideOrbit is allowing broadcasters to transact on its system for free over the next six months.

Wise said that one common fallacy is the assumption that the move toward automation is entirely driven by the buyers. “P&G has admitted that it went too deep with Facebook [via its automated buying system]. Facebook created an easy process that allowed them to go deep.”

TV would be wise to avoid the pitfalls digital has fallen into as it has developed its programmatic ad selling business, Wise added. One big pitfall: the cost of automated platforms. “For every dollar a marketer spends on [digital programmatic], 75% goes to what amounts to an automation tax,” Wise said. In TV, on the other hand, “85% of what’s spent gets to the consumer.”

Clearly, it’s up to the broadcast industry to find better ways to help agencies go deep with easy automated transaction processes.

Read all of TVNewsCheck’s TVB Forward 2017 coverage here.