As far back as 15 years ago, we were hearing that a substantial portion of TV ad spending was set to shift to digital media. As addressable media’s automated marketplace buying model and audience segmentation became the holy grail for campaign effectiveness, TV’s traditional one-to-many strength would start to feel like a weakness.
After a decade and a half of advertising technology innovation in pursuit of the dream of digital displacing TV in the media mix, TV advertising is still thriving. In fact, many of the advertising technology innovators that were founded in the 2000s specifically to take advantage of TV’s inevitable decline are now pivoting to integrate TV into their offerings, both broadcast and digital, linear and on-demand.
And it’s no wonder. Combined digital video and traditional broadcast TV advertising revenue in the US is forecast to reach $138 billion in 2023.
Five years ago this prediction would have felt excessively optimistic. The prices that buyers are willing to pay for TV audiences are based on more than 75 years of testing, trial, success, and failure. Time spent with TV is declining, and most of TV’s current revenue still derives from sales of ads in formats established in the 1940s.
But it’s increasingly apparent that TV can find a huge growth opportunity by embracing innovations born from digital advertising technology. With audience measurement standards in flux and pressure on media companies to extend ad campaigns across media channels, there’s never been a better time for TV’s advertising leaders to embrace innovation.
Data will generate new value for the TV industry
If we look at the rocket-like trajectory of the digital media industry, it’s obvious what created value for advertisers: the use of data for more precise audience segmentation and the perception of lower costs created by a performance-based assessment model.
What marketplace TV learned from digital
Despite its perceived benefits, digital’s marketplace (aka programmatic) buying model is not without its problems. The TV industry rightfully wants to avoid the pitfalls of the digital marketplace. Nobody wants to participate in a ‘Race to The Bottom’, nor do they want to become ensnarled in controversies over fraudulent placements, paying for bot clicks, or middleman ad networks taking a cut for nebulous services.
Players in the TV ecosystem are starting to cautiously place their bets, and as they do so it’s clear they know what they’re looking for from advanced advertising platforms:
- Automation – A system where inventory is purchased with phone calls and email is inefficient, time-consuming, and expensive. Automation to eliminate extended negotiation and manual data entry isn’t just a ‘nice to have’, it’s now table stakes.
- Innovation that generates value – The platform must offer tools and capabilities that make optimizes yield. There’s no incentive to move to a new marketplace if it creates a ‘remnant’ inventory mentality simply for the sake of automating previously manual transactional processes.
- Impartiality – Integrity and fairness must be paramount in the marketplace’s design, including ensuring that buyers and sellers can protect their first-party data.
- Transparency – Even if spots are allocated based on a buyer’s audience and campaign parameters, they must have full transparency into exactly where and when their spots will run. Buyers are wary of packages that dilute CPMs and ad effectiveness with blends of premium and less desirable inventory. On the other side of the fence, sellers must have full visibility into who they’re selling to so they can protect their pricing and avoid channel conflicts.
By standing relatively pat while digital went through growing pains in the early years, TV now has an opportunity to take only the best from digital media for its next stage of growth.
The new WO Marketplace opens access to new demand from digital-style buyers, increasing competition which in turn increases inventory value. With WO Marketplace, you retain full control over which offers to accept, while complete transparency into the client, the rate offered, and the creative allows you to accept only the offers that best fit your needs.
Contact us to learn more.