The growth of programmatic TV advertising

Five years ago, the nation’s first programmatic CTV/OTT (connected TV/ over-the-top) campaign kicked off the advertising industry’s wildest ride since the times of “Mad Men.” We’re still calling it the Wild West, but there’s a new, post-pandemic reality: the ad-tech revolution of real-time, omni-channel micro-targeting has firmly established programmatic as the dominant advertising paradigm.

Instead of Madison Avenue and bloated, incumbent networks calling the shots, it’s now the invisible hand of the market forcing sellers to do right by buyers. Consumer demand for relevance and a better experience has compressed advertising best practices into today’s high-tech and better-behaved moral new normal.

Relevance

Consumers intuitively know how they do not want to be treated: No more hitting them over the head with abusive over-exposure, and no more spraying irrelevant garbage to the masses and praying that a few will buy the dog food. That worked for the networks, brands and agencies for many years, not so much for the viewers.

Data-driven advertising, micro-targeted to households and individuals with messages tailored to their tastes and habits – across thousands of channels and devices – is what consumers want. With no sports, a distaste for news and less mind-numbing ad repetition to mollify them, they now expect nothing less than meaningful, respectful relationships with their programming and brand engagement.

Thanks to digital streaming, network TV can no longer count on viewers being where they want them and when. Unless it’s the Super Bowl, it’s wrong to expect viewers to plan their lives around the networks’ schedules. Advertisers will have to find consumers, instead of the other way around, and with programmatic micro-targeting, they can. Advertisers can earn and keep those relationships by delivering a positive customer experience.

Following people around and monitoring their online behaviors seemed a bit creepy at first. But consumers have gotten used to their digital exhaust being tracked and monetized, and have tacitly agreed to trade some measure of privacy for relevance and free content. With this acceptance, a moral covenant has evolved between buyer and seller: use that personal data to serve ads that matter, but protect and treat that data with discretion and respect. New privacy laws are seeing to this, but programmatic CTV/OTT  ads in particular are evolving toward more quality consumer experience and intimacy, which in turn builds brand trust. The earning of that trust benefits advertisers, thus the responsibility for keeping that trust lies with them.

Programmatic is based on audience targeting, not content targeting toward popular programs. The decisions behind automated, real-time bidding for inventory rely on layers of real data on individual buyer behavior instead of the demographic assumptions of what group types might watch a certain show. Programmatic is not only relevant, but immediate, serving ads of interest to likely buyers.

Reverence for people’s time and money is paramount. With relevant ads being served with moderate frequency across the long tail of omnichannel programming, why would people want to pay for multiple subscriptions to avoid the ads? It seems morally wrong to force people to pay for a single channel with so many choices out there. Take a clue from the cable companies who rank down there with congress and cockroaches in consumer favorability studies. It’s too late for them to start building trust now, and the next subscription-based content platform may be too late to the game as well.

Respect

Viewers are finding their sweet spots, the math connecting them to meaningful marketing is winning out, and the smart advertisers are coming out heroes by achieving cost efficiencies, and respecting and protecting the customer experience.

Those big upfront ad-buy contracts that the mega brands just clawed back during the pandemic were the lifeblood of Madison Avenue and the entrenched network industrial complex. But ad-tech is for everyone. Not only has programmatic CTV/OTT changed the relationship between buyer and seller over the last five years, it has democratized the ability for even the smallest advertisers to access new technology.

What programmatic really did over the last five years was to empower consumers. They led the change, the technology enabled it. Brands, agencies and content platforms are quickly adopting new technologies, and creating new moral imperatives to everyone’s benefit.