Media in Canada: What is left of the programmatic TV promise?

June 28, 2017

We move at high velocity in media these days. One year ago the promise of programmatic television was served up formally to the media buying marketplace. By fall 2016, this promise had quietly morphed into an offering that resembled programmatic media, but only to a degree. Fast forward another six months and any mention of programmatic television during this year’s upfronts was all but non-existent. A significant shift has occurred by the broadcasters over the past year. Juxtapose this against some of the messaging that has been coming from the digital players this spring and we are presented with two quite opposite views on this subject.

Unless you are a TV or video buyer in Canada, you could not be faulted for thinking that programmatic TV was thriving, or at least available in this country. But it is not, nor will it be in the near future, at least not in the true sense of what programmatic TV promised to offer.

We became acutely aware of this confusion when we reviewed a statistic in the 2017 Programmatic Landscape. Contained within the TV and video portion was a statistic that seemed rather misleading: that 73% of media buyers in the U.S. expect half their 2017 TV budget to be spent programmatically and that this trend will undoubtedly follow in Canada.* This statistic was not aligned with what we know about the U.S. marketplace, let alone the Canadian one. This article infers that programmatic TV is here in Canada and that it will significantly grow in volume.

EMarketer defines programmatic television as “an automated, technology-driven method of buying and delivering linear TV ads.” In addition to the buying platform, we see the core attributes of programmatic TV also encompassing real time buying, advanced targeting and learning, cross-screen video buy management and constant reporting with optimization. It is expected that 6% of all TV ad spending in the U.S. will be purchased programmatically in 2018 (eMarketer 2016). To the best of our knowledge, no TV inventory in Canada is being sold programmatically at the moment: this equates to 0% in this country.

The news of programmatic TV in June 2016 caused quite the excitement amongst our more digitally inclined clients, as well as small-to-medium sized clients who often found the many barriers to television too daunting. At last the panacea was coming: programmatic will significantly drive down the costs of television media, necessary lead times will become extinguished, campaigns can become hyper targeted and the buying will be executed on an easy to use platform just like Google. This all sounds so appealing to an advertiser except that there is nothing on the near horizon that suggests anything of the sort.

To the Canadian broadcaster’s credit, they have honed in on the advanced targeting aspect of the programmatic offering and are running with it. All of them are presenting the increased use of data to make TV media more effective, whether through the linear TV buying process or via addressable TV solutions. This is a welcomed evolution of the medium, although the pace of the addressable TV solutions does feel slow, albeit with a level of understanding why this is so.

Also to the broadcasters’ credit is their effort to protect revenues. TV media is a very powerful communication channel and nothing at the moment performs like it does from a reach, brand safety and persuasion perspective. It doesn’t make good business sense to allow real time buying to further commoditize and drive down the cost of TV media. The facts are this: demand remains strong and CDN TV ad spending is expected to grow from $3.29 billion in 2017 to $3.42 billion in 2020 (eMarketer 2016). None of the primary broadcast owners will allow outsiders to “plug-in” to linear TV inventory and drive down rates, nor do compatible systems exist to even allow this today.

If programmatic TV becomes more defined by targeting abilities than by the automated buying platforms or real time bidding, then programmatic TV in Canada will be on the rise. And maybe this conversation simply highlights just how quickly things change in digital. That said, programmatic TV is increasingly getting press coverage in the U.S., and ad expenditures are expected to double in the next 12 months. Given the Canadian television landscape, will programmatic TV become strictly a U.S. offering like local cable avails? Time will tell, and likely not, but for the moment the promised panacea has quietly left the room.

* – From The Programmatic Landscape: “73% – Almost 3/4 of media buyers in the U.S. (that giant TV market Canada often follows for technology and buying trends) expect half their 2017 TV budget to be spent programmatically.”