Programmatic linear TV is coming to Australia in 2015. Can you hear the fanfare? Not yet, perhaps, but there’s no doubt it will transform the industry. That said, there are at least four challenges that we will come up against along the way.
The first is the dynamics of the Aussie market. With just four free-to-air broadcasters and one dominant pay TV provider, the sell-through of inventory is high. This is in stark contrast to the US, where 83% of households subscribe to some type of multichannel video service (cable, telco or satellite), here the penetration is just over 30%.
This has big ramifications for data capture, but more on that later. The large penetration of cable services in the US means it’s easier to access inventory to build programmatic marketplaces.
Less competition means there’s less incentive to drive change in how media is bought and sold. IP-TV could change that, but it’s currently a tiny percentage of the major linear channels.
Meanwhile, the high cost of TV production against a relatively small population means broadcasters are keen to protect yield, and so discussion on programmatic often focuses on voicing concern of commoditisation.
This brings us to the second issue: education. While there’s a growing understanding of programmatic linear TV among the big broadcasters, largely their stance is very much ‘watch and wait’.
Perhaps that’s because they see it as a choice – the old way, or the new way – and making the leap is seen as a bold move. In reality, it’s not an ‘either or’ decision. Programmatic can supplement existing processes, helping to recognise and commercialise valuable niche audiences, thus stealing back lost dollars from online competitors.
The real education challenge may well be centred around buyers and brand managers. Many of them feel uncomfortable at the entirely new notion of buying a TV schedule without signing off a spot list.
There’s a certain comfort in knowing where and when your ads will run. It’s easier to tell your stakeholders that a spot will run in ‘The Voice’, rather than talk about a campaign that uses an optimised set of more fragmented inventory.
Today, most buyers continue to use traditional sales channels to buy their favourite spots, often tuning in to check it airs as scheduled. If they want to find efficiencies through audience buying however, they will need to move beyond this spot obsession.
The third issue is data. One of the key elements of the programmatic TV opportunity is sophisticated data sets to target against. OzTAM is the TV currency in Australia, so it’s imperative that any additional data can complement the demographic data it provides. We need to ensure that TV buyers have access to the same audience targeting provided in the digital realm.
To achieve that, there needs to be a way of tracking an action back to a TV set and household. Enter Multiview, part of MCN’s data and insights offering data from 110,000 anonymous homes.
This creates the ideal platform for capturing behavioural information. Beyond that, unfortunately, there is a lack of TV behavioural data that can be mapped back to a household at scale.
The final issue is infrastructure. In the digital world we take for granted the ability to connect directly with an ad server that relays real-time availability, delivery projections and pricing information. All this information sits within different systems in the TV world, with each broadcaster managing its inventory through its own system.
There isn’t an Australian supply-side platform to aggregate and organise inventory. The closest to it, though, is MCN’s Landmark; which allows for dynamic inventory management and allocation, effectively removing the need for an SSP, at least for Foxtel channels.
Despite these challenges, I am a firm believer we will see a lot of movement in this space over the next year. Technological change always faces what might seem insurmountable obstacles, but once they are pushed out of the way the impact can be significant.
In 1971 Gil Scott-Heron foretold that ‘The Revolution Will Not Be Televised’ because, he said, ‘the revolution will be live’.
Google it, it’s a great song. But it was too premature for him to add that the revolution will also be played back, targeted and automated. That’s the 2015 revolution, ‘brother’. The question is, do you sit on the sidelines, or do you take the plunge and help make TV history?