Programmatic ad sales have become a buzzword in the advertising industry over the past few years. It refers to the use of automated software to purchase and sell ad inventory. The technology has been primarily associated with digital advertising, but its impact is now felt in broadcast TV.

Traditionally, TV advertising has been sold through a direct sales approach, where media buyers and sellers negotiate ad rates, placements, and other details. However, programmatic advertising is changing the game by automating the buying and selling process. Programmatic ad sales allow advertisers to purchase TV ad inventory in real-time auctions, targeting specific audiences based on factors such as demographics, location, and interests.

According to eMarketer, programmatic ad spending for TV in the US reached $4.73 billion in 2020, representing a 66.5% increase from the previous year. This trend continued, with programmatic TV ad spending reaching $6.69 billion in 2021 and close to $7 billion in 2022, accounting for about 10% of total ad sales. eMarketer estimates programmatic ad sales for linear TV will grow to $8.42 billion by the end of 2024, accounting for 12% of total ad sales.

Effects of programmatic ad sales on broadcast TV

First and foremost, programmatic ad sales are making TV advertising more efficient. By automating the buying and selling process, programmatic advertising is streamlining ad sales, reducing the time it takes to execute a campaign, and lowering costs for both buyers and sellers. This efficiency is critical, especially for smaller TV stations that may not have the resources to support a large sales team.

Secondly, programmatic ad sales are making TV advertising more targeted. With programmatic technology, advertisers can identify specific audience segments and serve ads to those viewers in real time. This level of targeting is a significant improvement over traditional TV advertising, which relies on broad demographic data to reach an audience.

Moreover, programmatic ad sales offer greater transparency to both advertisers and TV stations. Programmatic technology provides real-time data on ad performance, such as impressions, clicks, and conversions, allowing advertisers to adjust their campaigns quickly. Additionally, programmatic technology enables TV stations to optimize their ad inventory by providing insights into what types of ads are selling and which are not.

Challenges with programmatic

Some challenges come with programmatic ad sales. One of the biggest concerns is ad fraud, which refers to any fraudulent activity that falsely represents an ad's performance. Ad fraud can occur when bots or other automated processes mimic human behavior, resulting in inflated metrics such as clicks or impressions. Ad fraud is a serious issue in programmatic advertising, which both advertisers and TV stations need to be aware of.

Another issue with programmatic ad sales is the technology challenges. Programmatic ad sales rely on complex technology systems, sometimes prone to technical errors or glitches. These can result in ads being served incorrectly or not at all, negatively impacting ad performance. Advertisers and media companies need a solid technical infrastructure to minimize the risk of technical issues.

Finally, programmatic ad sales may also impact the role of TV sales teams. As programmatic technology becomes more prevalent in the TV industry, some may wonder if there will be a need for traditional sales teams in the future. However, while programmatic ad sales are becoming more popular, they are not likely to replace direct sales anytime soon. Instead, programmatic technology is expected to complement traditional sales teams by making their jobs more efficient.

In conclusion, programmatic ad sales significantly impact the TV advertising industry, and their influence will only grow in the coming years. While programmatic technology offers many benefits, it also comes with challenges that advertisers and TV stations must be aware of. Ultimately, the successful adoption of programmatic ad sales in the TV industry will depend on how well the industry can navigate these challenges and maximize the benefits of this innovative technology.