Is programmatic television advertising viable?


Due to the social isolation that we are experiencing today with the pandemic, we spend much more time in our homes and consume more technology for home use. In addition to the desktop computer that many have used for remote work, there are also all the other electronic devices that we use to entertain ourselves, the television being one of the most representative.

Media investment is also affected by these changes. Advertising in streets and other locations of high people transit loses value and gives place to all the other alternatives that can reach the devices and screens used in households.

Therefore, doubts arise about the viability and possibility that in the near future programmatic advertising on television will be a reality, which can be seen regularly in other formats, such as audio ads and different types of in-stream ads.

Television advertising

The number of daily hours we spend in front of the television has increased considerably. According to electronic measurements carried out by the Kantar Ibope Media group, in Chile, the increase was even of 30% compared to periods before the quarantine, which is why current television advertisements are gaining more and more importance.

One of the most innovative types of television advertising, which is gradually being deployed on smart TVs in various countries, is programmatic advertising. This technology is intended to deliver current television commercials related to the interests of a specific audience.

What is programmatic advertising?

Programmatic advertising refers to a process of automated purchase. The company wishing to advertise can directly see the advertising slots available online and buy them on their own via real-time auctions called RTB (Real Time Bidding).

Programmatic technology uses artificial intelligence and data collection to increase customization efficiency in television advertising, to provide advertisements that matches the interests of the audience watching a certain channel or program.

This type of technology has gone so far that companies already offer programmatic advertising solutions to non-digital media, such as TV and radio. This is the case of SmartyAds, which offers programmatic purchases on TV from the digital context. The Jelli platform, for example, makes a technology that allows detecting the audiences that listen to specific radio programs available to its clients, thus optimizing the delivery of advertisements to non-digital radios.

How does television advertising work?

To better understand programmatic advertising, we must first understand how television advertising works conventionally.

The above depends on a human agent, whether it is an advertising agency or a marketing expert. It consists of negotiating an advertising space available on a television channel, setting the price, frequency, and time of broadcast of the advertisement.

With programmatic advertising, however, mediators are automated digital platforms, not people. With these, advertisers can see what the available advertising spaces are and buy them; without the need to waste time and money negotiating with a vendor, arranging meetings at specific times and locations.

Similarly, there are three parties involved in the technology:

  • Advertisers: those who seek to promote their brand or products.
  • Publishers: websites or applications that own the available advertising space.
  • The audience: potential customers of the advertisers who will consume the content.

Challenges of programmatic advertising

So, is programmatic television advertising viable? Although the answer is not certain at present, what we do know is that programmatic advertising still faces several challenges, such as:

  • The adjustment of policies in various countries to defend the privacy of consumer data.
  • Advertising companies taking advantage of general ignorance to charge extra money on platforms.
  • The loss of effectiveness of third-party data and the need to collect first-party data and customer platform data to ensure the campaign's success.

Although Zenith's "Programmatic Marketing Forecast 2019" forecasts indicate that this year 2020, 69% of all digital media will be marketed using programmatic technology, the truth is that this type of advertising continues to progress slowly for television.

The main challenge of programmatic advertising on TV is the contradiction created by the search for segmentation in the television audience, a media characterized by the level of coverage and reach offered.

There is no doubt that programmatic technology has several advantages and great potential. Regarding its viability on television, the main problem is the connection between mass audiences and segmentation efficiently for such an audience level.

At Mediastream we are convinced that this can be resolved with technology and will be contributing to the proper deployment of the digital transformation in companies on the part of the media. Sooner or later, the TV will have to adapt to a programmatic strategy, both due to the unstoppable advance of digital technologies and the need of consumers and advertisers: everyone is looking for it.