Convergence brings programmatic to all media, transforming radio, Out-of-Home, print, and other channels, into digital. And the shift of TV from linear to programmatic is just another confirmation of this tendency. As today video content is served to people endlessly, and wherever they want to consume it, advertisers have to keep up with the changing market and move from committing their TV campaigns months ahead towards real-time activations.
To address these new challenges that advertisers face, programmatic TV enters the scene. What is programmatic TV? At its core, it’s a technology-automated and data-driven way of buying and delivering ads that appear against TV content across the web, mobile, connected TV devices, and smart boxes. Although programmatic TV buying still has to get mature to completely replace traditional TV, many industry experts consider it as the future of TV ads.
What makes programmatic TV so prospective for advertisers? What advancements does it bring in compared to linear TV? And, eventually, what programmatic TV trends should advertisers embrace to keep up with their potential consumers? Let’s sort this out.
Programmatic TV star in the firmament of programmatic media
The pandemic made its adjustments to numerous industries, and naturally, that affected advertising. We’ve seen brands reducing their media spending: back in March 2020, IAB reported that 70% of US brands have adjusted or paused their planned ad expenses. Ad budgets cuts have not spared digital advertising, resulting in decrease by 33%.
Yet, ad budgets reduction hasn’t really affected programmatic TV. The lockdown, with its stay-at-home tendency, had brought people to Smart and connected TV devices. Hence, programmatic TV remained the top-3 channel for brands to serve their ads in front of their audience then and now.
Based on more recent data, while linear TV ad spends are expected to be flat for Q3 and down in Q4, programmatic TV ad buying will keep increasing. Moreover, the programmatic TV star has been on the rise for the last 5 years. Since 2018 programmatic TV advertising spend in the US alone tripled, reaching $4,73 billion, and this figure is expected to grow 1,5 more times by 2021.
Programmatic TV advertising trends to keep up with
With the tendencies mentioned above, programmatic TV looks like a promising advertising channel. Yet, as an advertiser, you don’t want to just invest in this channel, but spend your ad dollars wisely and efficiently. To do so, consider these key 4 programmatic TV trends.
#1 Engaging Ad Formats
Today programmatic TV creates a broad field for creativity and viewer engagement. Beyond the traditional 15- to 30-second TV commercial breaks and mid-roll ad pods, programmatic TV formats may include inline banners, feature rotators, or sponsored screensavers.
Besides, many formats involve interactivity, like full-screen interactive videos and overlays with call-to-action. Perhaps, a cherry on top of the interaction today is shoppable ads that have come to programmatic TV just recently, and seem to show retailer brands a totally new way to serve their ads. We’ll also see social-focused out-stream videos, connected TV AVOD, and native in-game advertising, among other high-performing ad formats.
One more curious format-related trend is multi-screen. It means the audience who watches a programmatic TV channel is simultaneously using one more device, mainly a mobile gadget, to send the messages or Google something.
According to the recent stats, the highest multi-screener rates belong to Norway and Turkey (76% each), Australia and New Zealand (75% each), Netherlands (73%), Colombia (72%), Hong Kong (69%). This trend allows advertisers to reach their potential consumers across multiple devices and split their ad spends with maximum efficiency.
#2 Connected TV devices
As a quick recap, connected TV (CTV) devices typically include smart TVs with a built-in internet connection and media platform, gaming consoles, like Nintendo Switch, Xbox and Playstation, as well as boxes, sticks, and other devices streaming content via broadband.
As for the ownership, back in 2018, the most popular devices in the US have been, actually, CTVs (75% owners), followed by game consoles (45%), smart TVs (41%), and other connected devices (40%). The trend of CTV penetration going in leaps and bounds continues today. Specifically, eMarketer predicted CTV usage in the US would surpass 200 million in 2020.
With increasing ownership, it’s essential to keep an eye on category leaders. So far, Roku devices lead the category with 44.2% of viewers, placing their head and shoulders over Amazon, Google, and Apple.
#3 Navigating the streaming platforms landscape
Also, when it comes to numerous streaming platforms introduced on the market, Roku offers the widest variety of channels and streaming services than other mainstream set-top boxes. Today Roku is #1 streaming platform in the US, with more than 43 million active accounts streaming the content for over 14 billion hours.
Although tech giants like Google, Apple, and Amazon are also nurturing their streaming platforms, their audiences lag behind Roku. Specifically:
- Amazon Fire TV serves video content for 40 million monthly active users
- Android TV has recently reached 50 million installs globally
- The number of Apple TV subscribers varies from 10 to 33 million, based on different sources
There’s an overlap in some cases, meaning the same users may have subscriptions across different ecosystems and own different CTV devices. This overlap may create more advertising opportunities.
However, such a strategy should be preceded by careful audience research. Otherwise, it’s wise to consider Roku, as the most promising platform, growing at the speed of light year over year.
#4 Programmatic TV across the globe
The US undoubtedly remains the market with the most extensive CTV ownership and highest advertisers’ revenue. According to the recent global statistics on the over-the-top (OTT) TV and video market, the United States’ revenue will reach almost 48 billion US dollars in 2023.
The US and China are the fastest-growing markets, with both countries’ revenues expected to double within the next five years. Yet, the programmatic TV trend goes beyond these two giants. In Europe, the biggest programmatic TV markets are the UK, Germany, and France.
How advertisers benefit from programmatic TV ads
Apart from innovative ad formats and growing audiences across the regions, screens, and streaming platforms, advertisers can also leverage advancements programmatic TV brings to the table. The key benefits it comes with are:
- Opportunity to reach a broader audience: In addition to the general increase of CTV viewership, with programmatic TV, advertisers can also reach cord-cutters and cord-nevers, who abandoned or never used linear TV. According to Nielsen, this audience is a growing trend: cord-cutting has increased by 48% in the past 8 years and keeps increasing.
- Robust targeting capabilities: Bringing the best from the digital ad world, programmatic TV ad buying offers advertisers truly advanced targeting, compared to the linear TV opportunities. It also goes beyond traditional programmatic targeting settings, like the age, gender, reach, and frequency components. What essential here is data and an opportunity to reach specific audience segments with personalized ad creatives and serve them across the multiple screens.
- Wise allocation of ad dollars: Unlike traditional TV, programmatic enables advertisers with nearly laser targeting, therefore letting them optimize the ad spend, paying only for ads served in front of their most relevant or desired audience. Plus, as the core of programmatic TV viewers is creditworthy users, it won’t be long until they convert into the buyers and customers.
- Advanced measurement: Another strong point is the advanced campaign results measurement. Programmatic TV metrics still need to be standardized across the industry, but that’s quite another matter, compared to low-to-no precise measurements available with traditional TV. With programmatic, advertisers can track viewable impressions, conversions, video completes, brand or sales lift. Besides, they can get a holistic view of campaign effectiveness in a multi-screen perspective.
Programmatic TV changes the way TV advertising is consumed, served, and measured, and that’s hard to ignore. Tech-savvy marketers ready to embrace programmatic TV opportunities fast, will boost their results soon enough. And most importantly, they will keep increasing their ROI and ROAS along with the growing trends of programmatic TV. If you’re seeking the opportunity to adopt this technology, find out how Allroll can help you!