Since the dawn of television broadcasting, Canadian households have been served a nearly identical lineup of commercials, with program ratings the tool used by marketers to help them reach a desirable audience.
But the time-tested approach is being turned on its head in the age of personalized marketing on desktop, social and mobile platforms. The disruptor is a concept called programmatic TV, which targets relevant advertising across the conventional dial.
Defined as the data-driven automation of advertising transactions, programmatic TV is fast evolving to a point where ads can be directed to clusters of consumers based on factors including postal codes and viewing histories.
Major broadcasters are working with software that aggregates viewing information gleaned from cable subscribers — along with third-party data focused on Web use — to help enable marketing targeted to a sub segment of the Canadian TV audience.
TV distributors are investing in the integration of IP technology into legacy broadcasting infrastructure, traffic and billing systems. Bell Canada, for example, unveiled a deal in 2016 with converged TV and video advertising software provider Videology “to bring greater efficiencies and holistic planning capabilities to Bell Media’s entire TV and digital video inventory.”
Luke Moore, managing director of independent Canadian ad agency Cundari, said all of the major cable companies are embracing digital networks and ad inventory, and some are even flirting with addressable TV.
The logical extension of programmatic advertising, addressable TV ads could potentially be targeted one on one, although Moore said marketing to a specific segment of an audience, such as those who live in Toronto’s affluent Rosedale neighborhood, would be more likely given privacy issues and the cost of honing in on a single household.
Programmatic ads, which mirror the automated and anonymously targeted marketing on digital platforms, are seen as a potential boost for the conventional broadcasting industry in Canada, which has seen revenue growth slow amid competition from over-the-top content providers. It could also help generate more value for ads on lower-tier cable networks with an excess of inventory.
Programmatic TV is growing rapidly in Canada, the U.S. and the U.K., and adoption has been accelerating, according to research website eMarketer, which is forecasting that 6 per cent of TV ad spending in the U.S. will be purchased programmatically in 2018 after reaching an estimated $1 billion (U.S.) in 2016, or about 1 per cent of the $73 billion traditional TV market. In its latest forecast on programmatic ad spending in Canada, eMarketer expects the category to grow nearly 25 per cent next year to $1.77 billion, or more than two-thirds of all display spending.
But while smart TVs and set-top boxes make it possible to gather extensive data on consumers’ behaviors and preferences, some experts say the market is being held back by a lack of trusted data jointly accessible to brands, agencies and media partners.
That hints at perhaps the most significant impediment to programmatic TV, which came to a head in February when TV set maker Vizio agreed to pay a $2.2 million (U.S.) fine to the FTC after violating privacy laws by tracking what consumers were watching, transferring the data to its servers and then selling it to third-party advertisers.
Fears that TV and set top-box makers are watching viewers triggered an outpouring of online advice on how to disable smart TV Web connections and also encouraged broadcast content creators and distributors to assure consumers that any third party data is generalized and does not focus on individual identities.
Against this backdrop some industry executives argue that the true role of television should not be reaching the few with specific messaging but in reaching the many, something it has done exceptionally well for more than 75 years.