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Programmatic TV to hit $10bn

News, 29 May 2015

NEW YORK: Programmatic TV buying in the US will grow fourfold between 2015 and 2019, by when it will be worth some $10bn according to a new report from Magna Global.

The strategic global media unit of IPG Mediabrands defined programmatic TV as all spending transacted through a technology platform rather than a traditional insertion order and said this currently accounted for between 2% and 3% of TV budgets but would grow to 4%, worth $2.5bn, in 2015, before picking up speed and surging to 17% of expenditure, worth $10bn, in 2019.

"It's nascent and can only grow from here," Vincent Letang, evp/global forecasting at Magna Global, told Advertising Age.

"TV, and other electronic media such as digital out-of-home, can use some of the technologies and data used by digital media formats to develop programmatic/automated trading, audience buying and advanced targeting," he added.

Most programmatic buying currently takes the form of audience buys but the advent of "household addressable" buys is set to significantly increase spending on ads served through set-top boxes.

Letang observed that household addressability was about to take off: "more MSOs will activate set-top-box-based software to be able to target a larger sample of their subscribers with live linear substitution commercial," he explained.

"All major MSOs have plans to make that happen in the next two years and once the solution is available through most MSOs it will generate more interest from more advertisers, national or local." 

Magna Global has previously stated its intention to automate half its buying in 2015 and earlier this year 15 smaller cable networks came together to create a consortium to help it reach specific audiences such as Hispanics, African-Americans and young people.

More generally, the company noted that "an influx of higher quality inventory" across all platforms was helping boost programmatic ad rates. And spending on programmatic video had risen to almost one third of total digital video spending, a proportion expected to rise to more than two thirds by 2019.

Data sourced from Advertising Age; additional content by Warc staff