The rise of CTV (connected TV) in programmatic advertising

The rapid growth of Connected TV (CTV) has a transformative impact on programmatic advertising. It is expected that CTV will become a pivotal channel for reaching modern audiences, blending the targeting precision of digital advertising with the expansive opportunities of traditional television. This article explores the unique advantages of programmatic advertising organized with CTV, such as real-time audience engagement and performance analytics, compares programmatic TV advertising to other methods of TV advertising, and offers some tips on organizing programmatic advertising the proper way.

What is programmatic TV? A definition

Programmatic TV is the automated buying, selling, and delivery of television ads using data-driven technology. Unlike traditional TV advertising, programmatic TV brings greater flexibility due to the possibility of real-time adjustments of programmatic advertising campaigns.

For example, a brand promoting boxing equipment can use programmatic TV to target boxing enthusiasts watching sports channels during specific time slots, ensuring the ad reaches the most relevant audience. Such an approach offers more precise targeting, ensuring that the ads reach people interested in boxing and willing to purchase such equipment.

How does programmatic TV advertising work?

Now let's clarify how programmatic advertising works in the domain of CTV. Programmatic TV advertising automates the buying and selling of TV ad spots using audience data and AI-driven algorithms. Unlike traditional methods that often involve lengthy negotiations and risk of overpaying for airtime, programmatic advertising involves much automation, flexibility, and speed when it comes to launching ad campaigns. With a programmatic approach, marketers can view available spots, define their target audience, set budgets, and bid in real-time. AI algorithms ensure that the ads are shown to the right viewers at the right time, maximizing their impact.

For example, gaming console brands target online gaming enthusiasts by using programmatic TV to display ads during esports events or gaming shows. With data insights, the ads are tailored to resonate with viewers. As a result, such brands can optimize reach and user engagement with their consoles while staying cost-effective.

Benefits of programmatic TV

Programmatic TV offers a revolutionary approach to advertising. Let's dive into the practical side of the question and research the core benefits of this approach. By combining outreach opportunities peculiar to traditional television with AI-powered targeting, programmatic TV advertising offers you the advantages outlined below.

Data-driven ad targeting

Programmatic connected TV relies on audience data to target specific demographics, interests, and viewing behaviors. AI algorithms use vast loads of user data to ensure that ads reach the most relevant viewers. ML models develop over time, boosting their analytical capabilities and improving the precision of ad targeting by a solid percentage. 

Automated TV ad buys

Automation simplifies the process of buying ad spots. This benefit eliminates lengthy negotiations and reduces the risk of overpayment for airtime. Programmatic TV buying of ads enables marketers to launch their campaigns much faster, making them more relevant and flexible.

Real-time bidding and optimization

Real-time bidding (RTB) and optimization are game-changers in the world of programmatic advertising. With RTB, advertisers can adjust their campaigns on the fly, responding to changes in audience behavior and market conditions. With such agility, marketers can modify their content, budgets, targeting criteria to the changing conditions. They can also reduce expenses on underperforming ad campaigns, maximizing return on investment (ROI).

Enhanced campaign insights

Detailed analytics provide insights into campaign performance, enabling data-driven decisions for future advertising strategies. The point is that programmatic TV platforms allow gathering vast loads of data through user impressions and interactions. All such data can be weaponized by companies later.

How to buy programmatic TV ads

Just like traditional ads, programmatic TV ads are purchased. The key point is that in programmatic advertising this process is often highly-automated. Programmatic TV advertising offers multiple methods for purchasing ad spots, catering to varying needs and strategies. Here are the primary ways to buy programmatic TV ads.

Real-time bidding (RTB)

This auction-based model allows advertisers to bid for ad inventory in real time. Using audience data and AI, RTB ensures ads are shown to the right viewers at the right time. This approach is very dynamic and ensures great advertising precision.

Programmatic direct

In this approach, advertisers work directly with publishers to secure premium ad inventory. It ensures transparency and control over ad placements, which is ideal for targeting specific channels or prime-time slots. Fixed prices, guaranteed impressions, and access to premium audiences reduce uncertainty. The main benefit of this method is that direct deals streamline communication and ensure consistent messaging across placements.

Private marketplaces (PMP)

PMPs are invitation-only auction platforms where premium ad inventory is sold to a select group of advertisers. This approach ensures exclusivity, which often means a high value of advertisement placements. The point is that marketers often get access to unique placements for their ads.

Audience-based buys

This approach targets audiences using precise viewer data instead of simply buying ad slots on specific networks or programs. It aims at reaching the right people at the right time. By analyzing demographics, viewing habits, and online activity, advertisers can deliver highly relevant ads. For example, a fitness brand can target health-conscious viewers watching workout content across multiple streaming platforms.

Programmatic TV vs. addressable TV

Addressable TV leverages sophisticated audience segmentation and advanced automation to deliver tailored video advertisements directly to specific households in real time. This capability sets addressable TV apart from programmatic TV, despite both relying on automation to enhance the efficiency of ad delivery. Instead of purchasing ad slots tied to specific programs, advertisers that use addressable TV target audiences directly.

Unlike traditional programmatic TV, addressable TV doesn’t require prior inventory selection or assumptions about viewership. The system dynamically assesses audience characteristics and selects the most relevant ads, ensuring advertisers reach only the desired demographic, geographic, or behavioral segments. The main drawback of addressable TV advertising compared to programmatic TV ad campaigns is that the former is much more expensive and requires more effort to implement. Therefore, most companies rely on efficient and much less challenging programmatic advertising methods.

Programmatic TV vs. linear TV

Programmatic TV takes advertising a few steps further compared to linear TV advertising. In traditional linear TV, where ads are placed based on broad audience categories and scheduled airtimes. On the contrary, programmatic TV allows advertisers to precisely target specific viewers based on factors such as demographics, geography, and behavior. With programmatic TV, advertisers don’t need to rely on generalized viewership patterns or just try to guess their audience and its preferences. Instead, they can use data-driven algorithms to serve ads to the most relevant audience at the right time and develop progressive advertising tactics. It is also important to note that the line between programmatic and linear TV is a little blurred nowadays. Sometimes, there even appears a term programmatic linear TV. 

For example, a brand can target a specific vinyl ad to music enjoyers in high-income areas. This precision makes programmatic TV more efficient for advertisers. They can count on it to optimize their ad spend and ensure their message reaches the most qualified viewers. This flexibility and targeting precision often lead to better outcomes for marketing campaigns.

Future of programmatic television

What is even better, programmatic television constantly evolves unlocking new opportunities for fast ad bidding and precise audience targeting. There are several key areas where the observed technology is expected to evolve. Here is a brief overview of the most notable programmatic television trends to look for in the near future.

Enhanced focus on fraud detection

One of the primary concerns in programmatic advertising is ad fraud. Advertisers face the risk of paying for non-viewable ads or ads placed in fraudulent environments. As programmatic TV continues to grow, one of its key future developments will likely involve improved fraud detection technologies. By leveraging advanced analytics with ad bidding platforms, marketers will be able to identify suspicious activities. Enhanced focus on security and fraud detection will, in turn, make programmatic television advertising even more attractive for many businesses.

Increased spending and viewership

Programmatic TV is expected to continue experiencing rapid growth. In the coming years, we’ll likely see a significant increase in both programmatic ad spending and viewership. No wonder that the market of programmatic advertising is expected to grow at an impressive rate of 31.9% up to 2028. As more consumers move to connected TV (CTV) platforms, advertisers will allocate a larger portion of their budgets to programmatic TV. With CTV ad spending expected to grow dramatically, programmatic TV will be at the center of this shift, offering advertisers new opportunities to reach their audience.

Data privacy and compliance

With growing concerns about data privacy and regulatory changes (like GDPR and CCPA), programmatic TV will need to adapt. Advertisers will be required to implement more robust privacy policies, especially when dealing with personal user data applied for analytics. The point is to ensure they comply with the main privacy laws and regulations while still offering effective ad targeting. The future of programmatic TV will involve technologies that allow advertisers to use data responsibly while still achieving high levels of targeting precision.

[Check out our recent article to know more about privacy-first marketing!]

Advanced audience segmentation

As the demand for more personalized ads increases, programmatic TV will continue to refine its audience segmentation capabilities. Efficient segmentation can be achieved with AI algorithms, ensuring that the ads reach the viewers who might be interested in their content. Let's explore the example of such segmentation. For instance, a luxury car brand can target middle-aged professionals with high disposable incomes who frequently watch finance-related content on smart TVs. Instead of broadly advertising during prime-time slots, the campaign can focus on moments when these viewers are most active, such as during evening financial news or streaming investment podcasts. This precise targeting ensures the ad reaches those most likely to convert.

Integration with cross-platform advertising

We may also expect a boom in cross-platform programmatic advertising. Advertisers will manage and optimize campaigns across various devices apart from TV through a unified dashboard. The main outcome of such an approach is a seamless and integrated experience for viewers. Cross-platform integration also creates great opportunities for interactivity. For example, even QR codes presented during programmatic ads on TV allow viewers to engage with a mobile phone. The presence of consistent ad messages across different devices enhances the campaign's impact on the audience.

Count on TeqBlaze for efficient TV programmatic advertising

If you need to embrace the potential of programmatic advertising, opt for advanced technological solutions that will help you bid for ads more efficiently. In this regard, Teqblaze, a company with unmatched expertise in the adtech domain is ready to help you. We certainly know how to boost your traffic monetization efforts. For example, we helped a notable traffic monetization company reduce their dependence on Google Ad Manager with our White Label SSP+Ad Exchange platform. 

The same solution helped a U.S.-based company that specializes in targeting and engaging with Connected TV (CTV) audiences establish their personalized advertising network, helping the customer optimize their resource consumption and gain more control over their infrastructure. Apart from the White Label SSP +Ad Exchange Platform, we help our customers establish their own ad management systems, optimize advertising campaigns with a White Label DSP, ensure consistent ad messaging across mobile devices with a White Label Mobile SDK. Check out our product development services to understand how Teqblaze can help you reach new heights in CTV advertising. 

Final words

Programmatic CTV advertising revolutionizes advertising practices, delivering unmatched precision, efficiency, and scalability. With advancements like real-time bidding, cross-platform integration, advanced audience segmentation, and enhanced fraud detection, the opportunities for growth are endless. To find the best CTV advertising opportunities and manage your campaigns efficiently, you need the right software and the right technology partner. Teqblaze offers efficient edtech solutions tailored to your unique business goals. Let us help you streamline your campaigns, boost ROI, and lead the way in programmatic CTV advertising. Contact us to take your advertising strategy to the next level!