For years, TV marketers have longed for a fully mature programmatic TV marketplace — and it’s not hard to see why.
Who wouldn’t want to combine the highly engaging TV environment with programmatic’s targeting, automation, and efficiency?
As programmatic TV scales, modern marketers can now invest millions with just a few folks behind a laptop — a far cry less than the large teams needed to complete a direct buy. It’s no wonder that 75% of all streaming TV buys are now made programmatically, or why this year’s Upfronts saw yet another increase in programmatic transactions.
But for all of programmatic TV’s growth, it’s still missing a crucial ingredient that can make it as easy and effective as search and social advertising: outcomes measurement and automated optimization.
Sure, programmatic TV can currently be efficient — reaching the right audiences at the lowest possible cost. Except for sophisticated direct-to-consumer (DTC) advertisers, brand advertisers in programmatic TV have effectively zero insight into whether these buys actually moved consumers closer to purchase. And that’s a big problem. After all, who cares what your CPM was if your ads didn’t work?
Why TV marketers must optimize for impression quality — not just cost and scale
When programmatic TV was in its infancy, many industry leaders — particularly on the sell side — were concerned that it would lead to a “race to the bottom,” where TV is bought and sold as a commodity rather than valued based on the unique content and context surrounding its ads.
While the private marketplaces (PMPs) aim to mitigate this risk for premium publishers, there are plenty of marketers using programmatic to purchase TV impressions as a commodity, striving to buy their target audiences at the lowest possible costs — no matter the context. The problem is that this strategy sacrifices much of their TV ad performance for a simple reason: TV impressions are far from commodities.
Indeed, TV ad impression quality varies greatly based on program, network, daypart, and the contextual relevance of the advertiser and its creative, among other factors. On average, a TV ad during a hotly contested primetime weeknight NBA game will impact your consumers more than one airing in overnight reruns. When your media buy fails to account for this variance, you can quickly wind up over-indexing for impressions less likely than others to move your target consumers closer to purchase. But how can you know?
Recent Nielsen and EDO research has shown that a leading TV advertiser was far more effective in its media buying when it optimized not just for cost and scale, but also for impression quality, as measured by the impression’s likelihood to drive consumers to visit the brand’s website or search for the brand online.
While keeping spend constant, we found that the advertiser was able to increase its incremental, ad-driven web traffic by 3.8x when it added impression quality to its optimization mix. That’s a lot of performance to leave on the table if you’re only optimizing for cost and scale.
Want to see the future of programmatic TV? Look at search and social.
In a world where ad impressions are far from equal, marketers need programmatic tools that enable them to optimize for the outcomes that are most predictive of future sales.
If that sounds familiar to you, it should. That’s because companies like Google and Meta built massive ad businesses in digital precisely because they enabled advertisers to optimize for key outcomes like website clicks and app downloads. And when calibrated and measured correctly, these are investment-grade signals billions of ad dollars can be optimized on. These platforms made outcomes optimization a crucial part of their value proposition from day one, and they continue to run circles around programmatic TV.
It’s worth noting that some of Convergent TV’s great strengths – premium programming and hybrid advertising plus subscription business models – overcome some of digital programmatic’s greatest problems. As “audience-first” digital ad strategies increasingly rely on programmatic, perverse incentives for inventory suppliers spawned massive amounts of fraud, with content farms and robotic traffic creating massive loops of targeting and optimization based on nothing.
If our Convergent TV industry — media buyers, sellers, and even programmatic TV platforms — are serious about making programmatic as instrumental to TV as it is to digital, we need to follow suit in integrating outcomes measurement and optimization into the marketing stack. After all, we have the technology.
So why race to the bottom, when you can have high efficiency and great advertising performance?
Let’s race to the top.