Understanding Programmatic TV - Part 2: Automation

This is the second of a multi-part series of posts to dispel some of the confusion and hopefully have a better common understanding of what is going on in the programmatic TV space. In our first post, we compared the differences between the programmatic TV process and the programmatic digital process. In this post we focus on how the process differences discussed in part one drive  radically different process automation needs. Thus the difference in the use of the term 'programmatic' in linear media (TV) vs. addressable media (video and digital.)

While technology providers in multiple media verticals now use 'programmatic' as a description of automation provided by technology, the business challenges that are solved by this automation are very different for linear and addressable television as compared with digital verticals, such as display and video. The easiest way to describe the difference is that in television, inventory is waiting for buyers, while in digital buyers are waiting for inventory. This difference is the result of selling future media placements or audiences as opposed to real-time impressions.

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What ‘programmatic’ means to TV media buyers

In practical terms, televisions buyers are buying promises of placements that meet a set of parameters (a package), as opposed to specific individual insertions or impressions. From a workflow perspective, this means that once a deal is done, sellers provide an initial report of how the media may be delivered (a prelog). Following the actual placement, sellers provide a final report of how the media was delivered, to satisfy the contract (a postlog). Sellers can change the specified units the deliver on a contract without breaking the ‘promise’ they made the buyer. In combination with the fact that some orders are guaranteed to run (non-preemptible) and some are not guaranteed to run (preemptible), managing how or if promises are fulfilled is one of the primary areas where ‘programmatic’ creates value for buyers of television media. This is not a problem in programmatic display and video, as each impression is run through an auction and supply outpaces demand.

Since buyers are buying on a forward basis, answering the following questions at scale is critical:

  1. What is available to buy?
  2. How much inventory is available?
  3. At what price is the inventory available?
  4. Can I present my demand if it is at a different price than the supply?
  5. Are deals automatically pushed into my workflow platform?
  6. Once I have a deal, what can I expect to be delivered?
  7. Once the deal was satisfied, what exact inventory was delivered?
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What programmatic means to TV media sellers

For sellers of television media ‘programmatic’ solutions are needed to solve the challenges associated with what inventory promises they can make buyers (sell orders), how those promises would be priced by P&I, and how those promises should be managed given the ever-changing landscape of available inventory. In programmatic display and video, ‘programmatic’ solutions focus on maximizing monetization of individual impressions as a minuscule portion of the inventory is sold on a guaranteed delivery basis.

Since sellers are making promises for inventory, answering the following questions at scale is critical:

  1. What is my unsold inventory?
  2. What inventory promises can I make to buyers?
  3. How do I charge the right price for this inventory given this advertiser and agency?
  4. Which demand in the market can I satisfy?
  5. Are deals automatically pushed into my trafficking system?
  6. Once I have a deal, what am I reporting might be delivered?
  7. Once the deal is satisfied, what exact inventory do I report was delivered?
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Programmatic vs. programmatic

As illustrated in the questions above, the challenges of transacting linear media are very different. While programmatic represents a set of automated functions in video and display, programmatic in linear media represents a whole different set of functions that need automation.

While several technology providers in today's market use the term programmatic about their products, current programmatic solutions only focus on audience optimization of linear buys. Mass Exchange is the only programmatic solution integrated through-and-through from the sell side trafficking system all the way to the buyers’ platform.

The Mass Exchange programmatic solution enables transactions on an audience or unit basis and can support all types of TV media buying on a single platform including national, scatter, direct response, and local.