Insight

The Sky is Definitely Not Falling

Bryan Noguchi, Senior Vice President, Media Director |

Programmatic TV buying – the term pops up everywhere and the reactions to it are decidedly mixed. Bathed in spectral light, it’s received with both Chicken Little-esque disaster overtones and euphorically starry-eyed messianic relief. I have to react with a little laugh, because Spot Runner came onto the scene more than a decade ago and we’re still debating the merits of its initial promise to streamline and democratize TV buying.

Despite some lingering reservations about the inevitable evolution toward programmatic TV buying, you can count on three things:

  1. It is imminent. The technology is sophisticated enough to do what TV buyers need it to do, and it will change how some TV inventory is bought and sold.
  2. This will be different from digital. The rollout in traditional media channels will be unique.
  3. Only the smart shops will win. Everyone else will perish

Seize the Opportunity

My media career has spanned the most disruptive period of change our industry has probably seen since TV displaced radio. I watched as the Internet steamrolled newspapers and magazines, and stood by as search and programmatic platforms steamrolled digital display. And I will live to see new technologies disrupt the way TV is planned and purchased.

So here is my advice — treat this next disruption as an opportunity. Shape your agency’s future rather than be overrun by the evolution. Those of us who plan and buy media are in the best position to find synergies and efficiencies between traditional and digital, between old and new, and across all of the touch points we use to connect with audiences. This is the best time in the history of media to be in media – our palette has never been richer, and the shift to programmatic will give us unprecedented control and versatility.

You will benefit from the labor-saving aspects of the technology. Your teams will be freed up to really think about the decisions they’re making and regain the bandwidth necessary to become the strategic partners clients want and deserve.

TV is a Different Animal

Start cross-pollinating your teams now. Your digital people already understand the interfaces that will sit on top of any given inventory source. They need to help your traditional teams become familiar with the tools and languages of programmatic buying. We all need to be conversant, but if you’re not from the digital space, it’s a pretty funky dialect.

Thankfully, live human beings will remain in the mix to protect inventory and keep customers satisfied. In the digital media space, actual people fell out of the process pretty quickly. This accelerated the devaluation of content and ad inventory, and has reduced the idea of customer service to a wildly circular web of inane and self-referential FAQs.

TV content owners and providers at least have the highly illuminated path of “what not to do,” created by their digital counterparts over the past several years. And even if they fail to learn the most basic lesson revealed by digital ad technology — protect the value of your content — they will have the fallback that demand will always be higher than inventory.

Inventory is Finite

With the web, the challenge was to manage an infinite amount of inventory from millions of sites. Most of the available inventory languished unsold, so once exchanges were established, buyers could access a lot for next to nothing in spend.

With TV, there aren’t millions of networks or channels – they number only in the hundreds, really – which means that the ad inventory is utterly finite. Couple this with a healthy paranoia around the potential to devalue that inventory and it’s not difficult to see why all of the post-Spot Runner and Google TV programmatic vendors have emerged as supply-side vendors vs. demand-side platforms.

Networks will protect the value of their inventory by sheltering it from the downward forces that would characterize a truly free market. The primary function of programmatic TV buying will be to match an ad to an unsold slot. That’s fundamentally different from driving ad efficiency. This is really about maximizing revenue for inventory owners.

Perspective is Everything

When I think of how complex the DRTV buying process has become, even I catch myself wondering whether an ad technology or platform could ever really effectively stand in for the highly nuanced tasks and interpersonal skills of humans. But then I am reminded that 17 years have gone by since Russian chess great Garry Kasparov was defeated by a machine. And I am amazed at an online Ted Talk that shows a swarm of quad-copter drones making millions of calculations per second to perform intricate tasks in three-dimensional space.

When futurist Ray Kurzweil, now of ad-revenue-fueled Google, predicts that robots will be smarter than us within the next 20 years, it’s clear that technology-driven change in media planning and buying is inevitable.

How agencies approach programmatic TV buying is largely a matter of perspective. Will it be that the sky has fallen around and on top of us, or will we have simply learned to fly?

References:

http://www.ted.com
http://www.independent.co.uk
http://www.theguardian.com