Digital Killed the TV Star

The Programmatic revolution will be televised

Remember the jock back in high school? He got a job in ad sales. We all the know type. A winning smile. A nice tailored suit. With free game tickets within reach. And, the agency planner held the power of media through this relationship.

Digital bidding threatened to replace this process, but it’s still a thing – especially with television. For now. The jocks are still the TV star.

Enter the nerds. Let’s talk about programmatic, the not-so-new marketing term on the block. As all other media march into the era of programmatic ad buying, television has been slow to adopt. But it’s too late to go back. Media planners and buyers have had a taste of a new way to purchase ad space through digital environments where the process is smarter, faster, and arguably better.

Why hasn’t television embraced our programmatic friend with open arms? The jock wouldn’t be the star anymore. Programmatic TV could usher in an era of auction-based purchasing, giving the highest bidder the ad time. Like the proverbial McDonald’s worker who’s being replaced by robots, many of these media negotiations will go the way of Google AdWords and Atlas ad server.

Follow the data trail, and the future becomes clear. The rise of Apple TV, Netflix, Hulu, and HBO is gaining traction among the coveted millennial generation. And, while the growth of ‘cord cutting’ has been both overstated and understated, there is still the reality that, little by little, millennials are opting out of traditional TV services in favor of the digital options. A projected 145.3 million people in the U.S. will be watching television online by 2017. That’s over half of the population of the United States.

The real story, though, is the lack of new subscribers. Of the 1.8 million new households in 2013, only 16.9% signed up for subscription-based television services.

What does this mean to the advertiser? That’s the biggest question. The power of network relationships is slipping from our fingers and being replaced by the power of data and our ability to analyze it. Much of this will be done by the computer.

Magna Global reports that by 2019, programmatic TV will account for $10 billion of TV budgets, about 17% of all TV spending. When we as advertisers can get real analytics on our digital TV buys just like we can on our digital buys, it will be very difficult to sell traditional TV to upper management, or even to ourselves.

We need to start thinking about how this pending change will affect our planning and buying process. At DBA, we have determined that our digital buying expert will be leading the charge for our media team. Digital used to be the red-headed step child at the agency. They used to be the computer geeks in the back office. Some of us remember the 80’s film, “Revenge of the Nerds.” History seems to be repeating itself.