Binge and TV are not words that could have gone together 20 years ago. Today, streaming services such as Amazon Instant, Netflix and Roku have made TV binges part of our daily lives. And as viewers move further and further online, the way we consume content has massively shifted.
Streaming services, which I like to call “advanced TV,” address our need for discoverability as well as our craving for personalized recommendations. But their success doesn’t just mean viewers can see any show they want, when they want. It also represents a new reality in the way that TV companies make money.
While none of this is news to those of us in the industry, what I’m about to say next is more controversial. I want to be clear about my bias: I come from the digital advertising space—programmatic and real-time bidding, to be specific. And I believe that all advertising channels, including television, will be made available through programmatic channels within the next few short years, possibly sooner. It is not a matter of if, but of when.
This is because the value of traditional cable bundle—where users sign up for hundreds of ‘premium’ channels, many of which they’ll likely never watch—is under threat. In a few short seasons advanced TV has taught consumers to expect and demand a la carte options, and network broadcasters such as CBS and pay cable operators like HBO have listened and begun to take action.
The old “more is more” bundle model is dying because it stands in direct opposition to a viewer’s ability to pick and choose shows. And as the bundle goes, so goes TV’s legacy system where, for decades, most advertising has been negotiated via complicated deals where commercials were sold in bulk weeks, months or years ahead.
With advanced TV, ads can be bought and sold in real-time, as well as in advance auctions like before. But unlike before, those auctions are run on exchanges that look more like the NASDAQ than the deal table at Sterling Cooper Draper Pryce of “Mad Men” fame. (Though in fairness to Harry Crane and his giant computer, media buyers have always understood that technology could be used to increase transactional efficiency and make ads more relevant and targeted.)
To be clear, those of us in advertising—especially RTB—know that speed is not a replacement for personalization. In most TV advertising today, commercials are still bought for specific channels, specific shows, specific spots and specific DMAs, but they are not tailored to the viewer. As digital players converge with the TV business, advertisers have come to realize that ads can be more relevant and targeted than ever before.
For example, in a personalized scenario, each household in a neighborhood might see a different ad during the commercial break of the next episode of a popular sitcom. In fact, it can get even more granular than that: within one household, mom might see an ad for a new car when she watches the show on TV, while Dad might see ads for a new movie when he streams the same show on his laptop. The point is that ads will be much more relevant because the future is about one-to-one impressions, not mass demographics.
TV advertising has always been about reach and branding. But in a digital world, it can do that and more. Programmatic advertising has created new winners and new losers, and entire companies are dedicated to making this change in TV advertising. According to Nielsen, more than half of global advertising (57 percent) is spent within the television channel.
As the concept of “television” evolves into advanced TV, The Trade Desk is poised with the world’s most sophisticated agencies and tech partners to seize that opportunity just as we did when publishers brought inventory into the RTB marketplace a few years ago. The speed of this paradigm shift is accelerating, and the opportunity for advertisers—and viewers—is immense.