Get With the Program

Media fragmentation is making programmatic buying a prominent media-buying strategy. But what is programmatic television, and how can it help direct response marketers sell their products?


Like big brands and many of their own retail partners, direct response marketers can now choose from a wide and expanding variety of advertising options, blending the traditional broadcast media with digital, social, and mobile channels to create that “secret sauce” that helps their products sell.

But while the explosion in channels can offer enhanced targeting capabilities, it has also brought added complexity to media buys. With so many audiences and so many ways to reach them, it is no longer easy to blanket the market with a single message. Not every marketer needs to be everywhere to get its messages heard, of course—but most need to be in a lot of places at once.

Programmatic buying may be the answer to making sense out of increasingly complicated cross-channel campaigns. “Brands need to be multichannel, and they need to be trying new things,” says Ben Zimmerman, president of Media Design Group (MDG), a direct response agency based in Los Angeles. “Brands should be doing everything they possibly can, and looking at programmatic to see how one buy affects the other.”

What Is Programmatic?

Originally created to make it easy to buy banner ads on websites, programmatic software systems organize multiple advertising options to ease the process of buying, selling, and serving ads across media channels. “Programmatic simply means automated,” says Cathy Hetzel, corporate president of Rentrak, a global media measurement company based in Portland, Ore. “Programmatic is any ad buy that gets processed through machines.”

In doing so, programmatic can help advertisers create order out of the chaos by bringing together everything necessary to inform a media buy. “What programmatic means to me is using multiple data sets to automatically plan and execute a media buy,” Zimmerman says. “The whole idea of programmatic is that you can go on one platform, pick the networks you want to be on, pick the CPMs you want to pay and the demographic you want to hit, and with one push of a button, execute a buy.”

Programmatic buying is already the preferred strategy in digital media, and is rapidly taking over mobile buys. eMarketer projects that when the final numbers are in, 2015’s mobile ad spend will total $9.33 billion, or 60.5 percent of U.S. programmatic spending. In addition, programmatic buys pay for one-third of digital video in the U.S., according to a report from media valuation agency Magna Global, and that figure will double by 2019.

The strategy achieved dominance in digital thanks to its robust targeting and adjustment capabilities. “Programmatic buying is becoming more important because it offers more granular audience targeting at lower media rates, increasing a marketer’s return,” says Jessica Hawthorne-Castro, CEO of Hawthorne Direct in Los Angeles. “Because of these increased efficiencies, more ad budgets are being shifted to programmatic executions.”

Television Programming

Budgets allocated to programmatic television buys are expected to quadruple from $2.5 billion of all U.S. TV spending in 2015 (or just 4 percent of the total spend) to $10 billion (17 percent) by 2019, Magna Global says. “It’s nascent, and can only grow from here,” Vincent Letang, Magna Global’s executive vice president and director of global forecasting, told Advertising Age.

MDG estimates that 60 to 70 percent of its digital buys are executed programmatically today, but only about 20 percent of its TV business is similarly automated. Many stations and networks continue to rely on person-to-person contact to sell space, and a few still prefer to fax in signed contracts. “This is a testament to where we are in the whole programmatic scheme,” Zimmerman says. “This is coveted inventory that’s used to being sold business-to-business. There’s usually a phone call and a lot of sales involved.”

But the omnichannel revolution is forcing marketers to execute buys across channels quickly, and with TV at the widest part of the funnel, it won’t be left out. “With so many marketers now doing both [digital and broadcast], there has been in increased push with TV media to similarly automate the media-buying and audience-targeting processes,” Hawthorne-Castro says. “The scale of programmatic TV is still very limited, but it will continue to grow with more and more entrants into the space.”

On TV, programmatic buying offers the advantage of speed—nothing can get an advertiser on the air faster or allow it to adjust its strategy quicker. “What’s great about programmatic is you can turn it on and down in seconds,” Zimmerman says. “Executing a programmatic campaign on 20 different networks could save you a tremendous amount of time—which, in DR, equates to money. You have to be able to work efficiently.”

Television advertisers can also take advantage of the same targeting efficiencies digital platforms are realizing. “Campaigns often produce aggregated consumer insights that can help inform and fine-tune marketing strategies by discovering valuable new audience segments,” Hawthorne-Castro says. “Many marketers turn to programmatic media to find out who their target audiences actually are based on comparative response rates.”

A Household Address

Magna Global estimates that about one-quarter of programmatic TV buys are already “household addressable,” meaning that they use data from cable and satellite providers’ set-top boxes to target specific households rather than a broader network audience. Addressable ads are expected to represent a greater portion of TV’s total programmatic spend going forward.

“The targeting aspect of programmatic gives advertisers the ability to buy the audiences most likely in the market to buy their specific products, and those targets can be extended across every viewing platform,” Hetzel says. “With addressable and dynamic advertising on VOD, automated buying on these platforms can occur just like on digital.”

Using addressable ads, marketers can target consumers looking for specific products, the experts say. “If you are a car manufacturer and you know someone is ready to buy a truck, you may be willing to pay to advertise at the household level,” Zimmerman offers as an example. “It is going to be very expensive to do so, but the efficiencies on that buy are going to be exceptional.”

Know Your Space

Transparency is, so far, programmatic’s main limitation. An algorithm can make multiple media buys so fast as to make them invisible, and many companies in the digital space have been victim to falsified data and murky reporting. “There is not a lot of transparency in where ads are actually running, and potentially even what markets they are running in,” Zimmerman says.

Hawthorne-Castro agrees that transparency can be an issue. “However, those concerns are manageable if you can find the right programmatic solution to generate the desired return on ad spend (ROAS),” she says.

“Any marketer or agency has to be aware what kind of inventory they are getting,” Zimmerman says. “What kind of inventory is it? How is it being aggregated? Where is the inventory coming from? These are all questions everybody should flesh out before they execute a programmatic buy.

“I’m a big fan of testing,” he adds. “Having advertisers test the programmatic space allows them to find out what they like and don’t like about it. For us, [programmatic] has been highly profitable. As more people start to test the waters, they will probably have very similar experiences. I would do it with programmatic; I would do it with video on demand, and with any other new or emerging linear channel.”

But will all ads—even television ads—soon be sold from a programmatic dashboard? “I don’t want to say it’s the Holy Grail, but it is the newest, freshest idea that’s happened in the TV space for quite a while,” Zimmerman says. “It’s nothing that is going to happen next year or in 2017, but more advertisers are going to try it, and more cable companies will adopt it as they see success stories. The business is definitely evolving toward that.”

Making Conversions Click

Total-Apps debuts a video ‘Buy’ button that can be shared via social networks.

Facebook, Instagram, and Twitter have recently introduced “buy” buttons to reduce the friction that often short-circuits purchases by whisking consumers away to product pages elsewhere on the Web. But in September, Total-Apps ( introduced an in-app click-through function that gets embedded in videos to assist in conversion—and it may be just the solution for direct response marketers wishing to target audiences on social media.

Designed for retail sales and fundraising, Video Checkout embeds a secure payment form into any video posted on Facebook, allowing shoppers to click and pay without leaving the site or its mobile app—where two-thirds of the platform’s traffic now originates.

“Even mobile-friendly websites tend to require multiple steps for checkout,” says Russell Droullard, marketing director for Aliso Viejo, Calif.- based Total Apps. “This is designed to streamline the process by eliminating extra clicks. [It] gives consumers the ability to enter their information at the moment they are engaged, and complete the sale right then and there.”

Embedding one-click conversion inside video content permits marketers to take advantage of Facebook’s considerable targeting tools, so they can direct sponsored video content to consumers in their target demographics. Better still, the payment form stays integrated with the video across pages and platforms, increasing the content’s reach every time that video attracts a “like,” share, or comment. “It’s a real opportunity to exponentially increase exposure to your video,” Droullard says.

The system also works with Instagram and Twitter links. Total-Apps handles payment processing through its sister company, MojoPay, sharing consumer information only with the merchant, unlike PayPal and other providers.

As the first click-to-convert function designed expressly for online video, it’s a natural for DR marketers with ready-made creative. “Nobody wants to click, and click, and click to check out,” Droullard says. “Combine the limited number of clicks with the fact that video has a high conversion rate already, and it’s a match made in heaven.” —IPM