‘A sea change’: Local TV ad market races to automation ahead of next year’s election

Digiday 11 Oct 2019 04:01

The year of programmatic TV advertising is something like the year of mobile: predicted for every year for a decade. For all the promise of being able to buy TV ads like digital ads, the reality has been a hodgepodge, running up against legacy buying systems, entrenched business models and protectionist concerns of existing heavyweights.

To see the issues up close, take the process of the “make-good,” the practice of ad sellers needing to make up for not being able to fulfill an advertiser’s ad buy. Making good on an unfulfilled digital ad buy can be relatively easy: refund the advertiser for the undelivered impressions or continue to run the ad against the intended audience until the necessary number of impressions are met. Making good on an unfulfilled TV ad buy can be much more complicated because advertisers are buying against shows, not audiences, and stations are generally serving the same ad to everyone tuning into a show at a given time.

An advertiser may buy ads against a local TV station’s afternoon talk-show lineup as a proxy to reach middle-aged women in a specific city or region. However, if a smaller-than-expected audience is watching those shows when the ad is scheduled to run, the TV station cannot simply carve out a slice of the audience watching its other shows and slot in the advertiser. The station also may not necessarily be able to place the advertiser in the next day’s or week’s afternoon talk-show lineup for a variety of reasons: the advertiser had been promoting a sale that will be over by then, the talk shows will be airing repeat episodes and the inventory will be less valuable, the inventory will be much more valuable than what is owed to the advertiser, etc.

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