US TV lags in programmatic buying

14 August 2013
CAMBRIDGE: European broadcasters are better positioned than those in the US to lead the way in the development of programmatic buying of TV advertising, thanks to a fragmented media landscape, a leading industry analyst has said.

A new report from Forrester – Convergence Disrupts Europe's TV Ad Market – identifies five trends across the region, including on-demand viewing, TV anywhere, online professional content, addressable advertising and programmatic buying.

Author Jim Nail said these trends would result in the disruption of established buying practices over the next three to five years and that marketers would have to adopt new tools and strategies in order to achieve the desired reach and results from their video advertising.

He told Ad Exchanger that the whole idea of programmatic buying remained "nascent" in both the US and Europe, "but the hurdles to accelerating programmatic in TV within Europe versus the US are much lower," he added.

He pointed to the range of technological and regulatory practices across the continent and argued that this had allowed greater flexibility and a willingness to experiment.

"So Europe will likely point the way for development of programmatic TV buying in the US," he concluded.

More specifically, Nail expected the biggest changes to happen outside primetime viewing in areas of low demand.

"The nice thing about niche cable and local avails, there is a lot less risk for marketers buying spots in those areas, as opposed to the difficulty in changing the way they buy primetime," he said. "That's where programmatic TV will emerge."

And once it proved successful, he anticipated "its use will expand and accelerate upward across the different tiers of value".

He warned, however, that marketers needed to craft different messages for different audiences according to device, mindset and time.

"If it's an insurance company, and the target audience is older, you probably don't need to extend that TV ad to mobile, where the audience tends to be younger. So that thinking has to change before programmatic TV can truly take hold," he said.

Data sourced from Forrester, Ad Exchanger; additional content by Warc staff
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