By Jason Friedlander, Director, Marketing Communications
For decades, traditional broadcast advertising relied on a model where large media buying departments bought ads to fill up available spots. This approach has become problematic with the rise of over-the-top (OTT) content delivery. As OTT audiences and products come to market, and the overall experience becomes more personalized and dynamically generated, the number of available spots has exponentially grown, making it nearly impossible to go out and sell those spots. As a result, content owners and their ad buyers are often left saying, “If I can’t fill this spot, I can’t fill this spot.” And in doing so, they’re leaving money on the table.
Online content is being delivered programmatically, and it’s time that advertising follows suit. In the world of programmatic advertising, an array of rules about the advertiser, ads and the consumer draw the right ad at the right time from a massive pool of ads. During every break in programming, these rules identify the ad that’s the best fit for the user at that moment. Over time, with more and more individualized viewer data — what she watches or where he shops — each ad spot becomes increasingly more valuable.
For example, data gathered about my viewing and shopping habits would indicate — with, say, a 95 percent confidence rate — that if I were served an ad for a Patagonia jacket at a specific time in my buyer’s journey, I’d very likely purchase it. As data about me continues to accumulate, ads can be targeted with ever greater degrees of accuracy. Advertisers will gladly pay a lot to reach me, or any other consumer, when they already know there is a high level of purchasing engagement in what they have to offer.
In a perfect world, every ad served at any given time is the most valuable ad for that given spot. And with an unprecedented ability to aggregate and analyze this data, content providers and advertisers now have the tools to move toward this reality.
So, what’s holding them back?
Broadcasters and content owners are not stepping forward for various reasons, from lack of tools and reliable data, to business practices and an overall lack of services that need programmatic ad loads. At the same time, brands are not creating the inventory needed to enable this ideal content and ad experience.
Brands make big-budget ads on which they need to make their money back, but they’re leaving a gap on the lower end, less-expensive ads that could sit in that massive pool and get called when the user and time are right. These kinds of ads need to be created along with the high-budget, multi-million dollar ads, and added to the programmatic inventory pool so that highly targeted versions are available for insertion all around the world.
Lower-cost programmatic ads are an alternative to doing nothing and not offering users the experience they are demanding, and more importantly, not monetizing each ad spot to its greatest potential. Once the programmatic ad inventory is expanded, it becomes possible to offer consumers the ideal content and advertising experience — and to stop leaving money on the table.