In the battle against online media, programmatic may be TV’s secret weapon

Mitch Waters
By Mitch Waters | 21 October 2014

Whenever I hear people talk about the death of TV (usually from digital natives), I have a little chuckle to myself. TV is not dying. In fact, there’s an enormous opportunity in front of it…provided television behaves much more like digital, and vice versa.

There’s no doubt that traditional TV faces a challenge. TV revenue has grown very little this last year: the Nine Network and Seven West media both saw a 3.5% rise in metro revenues, heavily outstripped by digital growth, which climbed 17% according to latest IAB/PWC figures.

It’s worse in the US, where upfront buying is reportedly down as much as 4% this year, the biggest downturn since the global recession. Traditionally in the US, about 80%  of TV inventory is bought upfront, so even a small percentage point decline has a large effect. Brands are looking for the same flexibility they enjoy in the digital space - buying ad space when they need it as part of an integrated and data-driven campaign.

Digital players are emerging as traditional TV’s biggest competition from both an audience and an advertising perspective and are being very aggressive as well. Reports of Facebook and Google asking for up to 40%  of TV budgets to move to online have been widespread. They are using online accountability to demonstrate audience migration and to prove ROI in advertising dollars.

Panel-based measurement was sufficient enough when viewer choices were limited. But, with the many television channels available for viewers today, not to mention the advent of quality programming in digital, accurately capturing viewership has created a massive challenge, one which has marketers taking a deeper look into how their ad spend should be allocated for maximum effect.

Broadcasters need to, and can, adapt. Seven and Nine’s pitch to increase peak time advertising to 20-minutes per hour (from a current 13 minutes) is a short-term band-aid. We can reasonably expect a larger share of their audiences to increase their viewing time on time-shifted or digital environments if those ad loads prove too much. Or, worst still, viewers will flock to ad-free illegal or pirated content.

Programmatic provides TV broadcasters a real opportunity to take back those TV budgets that are under fire, supporting their clients’ buying decisions with rich data sets and enabling campaigns that use the optimum mix of publishers across multiple delivery channels.

To be clear, the TV panel will still be pivotal for the ecosystem to work; it is, and will continue to be the TV currency, but buyers are asking for more.

In the digital world, data equates with value. Generally, the more a publisher can demonstrate who is viewing or clicking, the higher the premium. In the traditional TV world, behavioural or set-top box data can compliment the viewing panels to provide broadcasters with detailed behavioural insights. These deeper data feeds can be onboarded onto technology platforms to better package TV media by audience and increase the attractiveness of available inventory.

Ad spots that attracted low audience numbers, based on panel measurement, would see their yield substantially increased as they are aggregated by audience and become tools to target specific audiences in a more holistic on-air on-line hybrid campaign.

It’s also likely to improve the yield of blockbuster shows. Major brands are likely to see that broadcast TV can continue to reach a large part of their target market. Without the supporting data, they will continue to siphon off slices of this spend to online, where they have a clearer idea of who is watching.

At the end of the day, irrespective of the delivery method, TV is still TV. The viewer, watching on that massive high-definition TV that dominates the living room, doesn’t care how it’s delivered. Advertisers don’t care, either, provided they reach the right people, at sufficient volume, at the right time in the purchase funnel. This relies on as much data as possible to support buying decisions and the ability to build campaigns across multiple platforms, with an efficient means of distributing material to the appropriate outlets.

In a word, programmatic.

Mitch Waters Australia and New Zealand
Managing Director

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