Programmatic Ad Buying: Coming to a TV Near You

By Adam Flomenbaum 

oreo285Let’s engage in a bit of a thought exercise.

Scene: Sometime in early February, 2017. It’s Super Bowl LI. There’s 13:22 left in the third quarter and suddenly the lights go out.

Oreo tweets the following:

The tweet is hailed as sheer marketing genius: a company without a linear TV ad somehow manages to come out the winner on the most competitive night of the year.

Now, though, Fox has made all ad slots during the fourth quarter available via programmatic buying. The auction officially will close at the end of the third quarter. Because they have shown that they can work with lightning speed in the past, 360i and The Martin Agency rush to produce a 15 or 30-second spot, miraculously pull it off, get sign-off from Fox on acceptability, and submit a $8 million winning bid for a fourth quarter time slot. Building on “YOU CAN STILL DUNK IN THE DARK,” the teams manage to amplify the effect of the tweet by magnitudes.

Far-fetched? Yes, but not completely.

Two weekends ago, ESPN sold its first programmatic ad during the Saturday 1am edition of ‘SportsCenter.’ TurboTax purchased the ad in a web-based auction as part of a new initiative ESPN announced in December. Writes Mike Shields for WSJ’s CMO Today:

Although it ran rather late at night, this Turbo Tax ad is potentially groundbreaking for the TV business. Networks have generally been reluctant to adopt the Web-based auctions that are common in online advertising, fearful that it could lead to low prices for what should be premium inventory. There are signs programmatic approaches are slowly starting to gain traction, however, and ESPN wants to get out in front of the wave.

An ESPN spokeswoman told Shields that ESPN outbid “several other advertisers for the right to air the spot,” but would not comment on the amount of the winning bid.

Of all networks, ESPN certainly does not have an inventory problem. What they see, then, is the potential for programmatic to command much higher prices on the open market – not lower prices. Even if and when more networks go this route (one of the many things they will apply to linear from their own TV Everywhere learnings), TV ad sales teams – for the most part – won’t be in trouble. Package deals across linear, digital, and social, and guaranteed money will still anchor prime slots, but programmatic buying may go hand-in-hand with the trends toward unbundling.

It’s still in its infancy, and there’s been more talk than action, but if ESPN is doing it, others will soon follow in droves.

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