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Published: 26/10/2016 | AUTHOR: Tom Hunter

programmatic TV advertising

In much the same way as online media, the way television inventory is bought and sold has undergone significant changes in the past few years. Spearheaded by solutions such as Sky AdSmart, we’ve seen a move away from traditional direct buys and the accompanying raft of emails, phone calls, spreadsheets and insertion orders. In its place is a more targeted, more flexible and more cost-effective solution – offering a range of exciting new opportunities.

The ‘good’ old days

TV consumption has changed dramatically in the past decade, driven by the advent of on-demand services and increased multi-device usage. Whereas historically your choices would have been somewhat limited, based on what was being shown on your TV at the time across your available channels, nowadays, it’s non-linear. You decide exactly what you want to watch, when you want and wherever you want.

But as TV consumption has evolved, so has the TV media buying process. Up until recently, the process had followed the same formula for many decades. Rates, space and timings would be negotiated, back and forth, between agencies and TV channels in what was a very manual and time-consuming process – and measurement would be limited once the ads were live.

Out with the old, in with the new

With significant advancements in online advertising through the development of programmatic solutions, it was only a matter of time before the technology filtered through to TV.

The world of programmatic has shot up around us and many brands are having to learn quickly how to run an effective campaign. Find out more about these solutions in our recent article on programmatic advertising.

In the UK, the first widely available offering was Sky’s AdSmart solution, enabling advertisers to cherry-pick audiences based on factors such as age, location, lifestyle, viewing habits etc. rather than choosing to fill a pre-selected slot around programmes they assume the target audience will be watching. Now, an entire street of Sky customers could be watching the same channel at exactly the same time, but all see different ads, depending on the demographic of the household.

Notable examples of brands pushing the boundaries of the technology include Argos, which recently announced it has been working in partnership with Sky to better understand its customers and define new target audiences when advertising on TV. As part of the project, Argos revealed it has overlaid its own customer data with Sky’s viewing data – scrutinising any areas of crossover between the two data sets and ultimately creating 100 customer segmentations. This has enabled the brand to plan more strategically, targeting new audiences likely to convert, based on data, rather than simply focusing efforts on popular shows. As a result, Argos has reported a rather impressive £7m incremental revenue.

In addition to this, we’ve also seen the introduction of various innovative new formats, moving beyond the traditional 30-second ad. Examples include ‘in-program’ [sic] ads from US company Watchwith, which enable networks and advertisers to run interactive promotions within a programme while it’s being shown, à la YouTube ‘related videos’ and ‘subscribe’ call to actions. Interestingly, a recent study carried out by Magid Associates found ads of this kind to be more effective in driving recall than your run-of-the-mill TV ad.

The outlook

In 2015, UK TV advertising revenue topped £5bn for the first time ever, up 7.4% compared with 2014 (Thinkbox revenue figures) – accounting for 26.9% of the total UK ad market (AA estimate). What’s more, TV advertising is now 30% cheaper in real terms than it was 10 years ago, and has the highest ROI of all forms of advertising (Ebiquity, ‘Payback 4’, 2014). Impressive, right?!

Despite having the wind taken out of its sails by Brexit, heading for a 5% drop in Q4 2016 – the TV ad market is now an incredibly exciting place. With TV ad production now available at a fraction of historical costs and a vast range of data-driven, measurable and affordable solutions/formats available, there has never been a better time to explore or revisit TV advertising.

See below for the latest TV ad we’ve produced, for official .UK domain names registry Nominet.

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