Understanding programmatic TV advertising

Abstract

Television is undergoing tremendous technological developments, which will enable marketers to direct commercial messages to more specific audiences at the individual and/or household level. Traditional ways of buying TV advertising are being challenged by the programmatic approach, which originated with search and display ads, and uses data and technology and real-time auctions to automate transactions between buyers and sellers. We discuss the changes to TV that enable the rise of programmatic models and propose that its future success depends on the coordination and availability of three factors, abbreviated DAD: distribution, ad inventory and data. We also elaborate on the effects of media context and how the TV program environment matters for advertising effectiveness. Finally, we discuss the future of TV advertising and related research needs.