Programmatic TV trends: Where should advertisers invest?

Industry Insights
Table of contents

    Convergence brings programmatic to all media, transforming radio, Out-of-Home, print, and other channels, into digital. The vivid shift of TV from linear to programmatic is just another confirmation of this tendency. As today video content is served to people endlessly, and wherever they want to consume it, advertisers have to keep up with the changing market and move from committing their TV campaigns months ahead towards real-time activations.

    To address these new challenges that advertisers face, programmatic TV enters the scene. What is programmatic TV? At its core, it’s a technology-automated and data-driven way of buying and delivering ads that appear against TV content across the web, mobile, connected TV devices, and smart boxes. Although programmatic TV buying still has to get mature to completely replace traditional TV, many industry experts consider it as the future of TV ads.

    What makes programmatic TV so prospective for advertisers? What advancements does it bring in compared to linear TV? And, eventually, what programmatic TV trends should advertisers embrace to keep up with their potential consumers? Let’s sort this out.

    Programmatic TV star in the firmament of programmatic media

    The pandemic made its adjustments to numerous industries, and naturally, that affected advertising. We’ve seen brands reducing their media spending: roughly 70% of US brands have adjusted or paused their planned ad expenses. Ad budgets cuts have not spared digital advertising, resulting in a decrease by 33%. 

    Yet, ad budgets reduction hasn’t really affected programmatic TV. The lockdown, with its stay-at-home tendency, had brought people to Smart and connected TV devices. Hence, programmatic TV remained the top-3 channel for brands to serve their ads in front of their audience. 

    Based on more recent data, while linear TV ad spends are expected to be flat for Q3 and down in Q4, programmatic TV ad buying will keep increasing. Moreover, the programmatic TV star has been on the rise for the last 5 years. Since 2018, programmatic TV advertising spend in the United States alone tripled.

    Programmatic TV advertising tendencies and innovations to follow

    Programmatic TV allows for better future opportunities. Yet, as an advertiser, you don’t want to just invest in this channel, but spend your ad dollars wisely and efficiently. To do so, consider these key 4 programmatic TV trends. 

    №1 Engaging Ad Formats

    Today programmatic TV creates a broad field for creativity and viewer engagement. Beyond the traditional 15- to 30-second TV commercial breaks and mid-roll ad pods, programmatic TV formats may include inline banners, feature rotators, or sponsored screensavers. 

    Besides, many formats involve interactivity, like full-screen interactive videos and overlays with call-to-action. Perhaps, a cherry on top of the interaction today is shoppable ads that have come to programmatic TV just recently, and seem to show retailer brands a totally new way to serve their ads. We’ll also see social-focused out-stream videos, connected TV AVOD, and native in-game advertising, among other high-performing ad formats. 

    One more curious format-related trend is multi-screen. It means the audience who watches a programmatic TV channel is simultaneously using one more device, mainly a mobile gadget, to send the messages or Google something. 

    According to the recent stats, the highest multi-screener rates belong to Norway, Turkey, Australia, New Zealand, Netherlands, Colombia, and Hong Kong. This trend allows advertisers to reach their potential consumers across multiple devices and split their ad spends with maximum efficiency.

    №2 Connected TV devices

    As a quick recap, connected TV (CTV) devices typically include smart TVs with a built-in internet connection and media platform, gaming consoles, like Nintendo Switch, Xbox and Playstation, as well as boxes, sticks, and other devices streaming content via broadband. 

    As for the ownership, back in 2018, the most popular devices in the US were, actually, CTVs (75% owners), followed by game consoles (45%), smart TVs (41%), and other connected devices (40%). The trend of CTV penetration going in leaps and bounds continues today. Data from eMarketer has revealed that CTV ad spend will reach USD$14.44bn (£10.8bn) this year, up 59.9% from 2020.

     

    With increasing ownership, it’s essential to keep an eye on the category leader, which is Roku without any doubt. The total hours streamed on Roku in the United States hit a record of approximately 20.9 billion in the first quarter of 2022.

    №3 Navigating the streaming  platforms landscape

    Also, when it comes to numerous streaming platforms introduced on the market, Roku wins in several terms. At least, in the United States, where it has over 50 million active accounts. This fact alone makes Roku the leading streaming platform in this country. Its accounts there stream videos for more than 14 bln hours! Roku fairly over beats such industry monsters as Amazon, Google, and Apple. The following stats prove it:

    Those statistics are good, but they do not put them ahead of Roku. There’s an overlap in some cases, meaning the same users may have subscriptions across different ecosystems and own different CTV devices. This overlap may create more advertising opportunities. 

    However, such a strategy should be preceded by careful audience research. Otherwise, it’s wise to consider Roku, as the most promising platform, growing at the speed of light year over year.

    №4 Programmatic TV across the  globe

    The United States undoubtedly remains the market leader when it comes to the most extensive CTV ownership and highest advertisers’ revenue. In this country, OTT and video revenue worldwide has all chances to hit the mark of $48 bln in 2023.

    How advertisers benefit from programmatic TV ads

    Apart from innovative ad formats and growing audiences around the different parts of the world, screens, and streaming platforms, advertisers can also leverage advancements programmatic TV brings to the table. The key benefits it comes with are:

    • Opportunity to reach a broader audience: In addition to the general increase of CTV viewership, with programmatic TV, advertisers can also reach cord-cutters and cord-nevers. What do these terms stand for? They characterize users who fully banned the usage of linear television. This audience is a growing trend. 
    • Robust targeting capabilities: Bringing the best from the digital ad world, unlike linear television with its features, programmatic TV ad buying offers advertisers advanced targeting. It also goes beyond traditional programmatic targeting settings, like the age, gender, reach, and frequency components. What is essential here? That is data along with a chance to create and spread highly personalized ad creatives and serve them across multiple screens to appeal to the right watchers at the right time in the right place.
    • Wise allocation of ad dollars: Unlike traditional TV, programmatic enables advertisers with nearly laser targeting, therefore letting them optimize the ad spend, paying only for ads served in front of their most relevant or desired audience. Plus, as the core of programmatic TV viewers is creditworthy users, it won’t be long until they convert into the buyers and customers.
    • Advanced measurement: Here is another perk suggested by programmatic television advertising. Programmatic TV metrics still need to be standardized across the industry, but that’s quite another matter, compared to low-to-no precise measurements available with traditional TV. With programmatic, advertisers can track viewable impressions, conversions, video completes, brand or sales lift. Besides, they can get a holistic view of campaign effectiveness in a multi-screen perspective.

    Takeaways

    Programmatic TV changes the way TV advertising is consumed, served, and measured, and that’s hard to ignore. Tech-savvy marketers ready to embrace programmatic TV opportunities fast, will boost their results soon enough. And most importantly, they will keep increasing their ROI and ROAS along with the growing trends of programmatic TV. If you’re seeking the opportunity to adopt this technology, various platforms for streaming devices can help you!