Future of TV Briefing: How programmatic became a bigger part of the TV and streaming ad business in 2023

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This Future of TV Briefing covers the latest in streaming and TV for Digiday+ members and is distributed over email every Wednesday at 10 a.m. ET. More from the series →

This week’s Future of TV Briefing looks at how this year’s upfront and recent announcements from AMC Networks and Paramount indicate the progression of programmatic in the TV and streaming ad market.

  • Get with the programmatic
  • A streaming content cost case study, TikTok’s long-form push and more

Get with the programmatic

This year would seem to have been a fairly momentous one for the programmatic side of the TV and streaming ad market. Programmatic played a bigger part in upfront deals signed this year. AMC Networks officially made its linear TV networks’ live inventory available for sale programmatically. And programmatic supply-side platforms have established more direct lines to streaming ad inventory, as evinced most recently by Paramount’s Conduit ad product.

And yet, according to TV and streaming ad buyers and sellers, this year doesn’t exactly mark a massive step change in the industry’s programmatic evolution.

“At Paramount, [programmatic is] one of the primary ways we do business, and that has been true for a couple years now,” said Leo O’Connor, svp of advertising at Paramount.

AMC Networks’ evp of commercial sales and revenue operations Evan Adlman concurred. “I don’t know if there’s necessarily a change. I think buyers and sellers are adopting the transaction type more and more, and they’re adopting it at a faster pace than traditional digital did a long while back,” he said.

In other words, this is the natural evolution of an ad marketplace adopting programmatic as a buying method, albeit maybe a bit sped up. “It probably got exacerbated a little bit faster than we thought it was going to just because of where the market’s at right now and because of the overall sheer supply in the market,” said Tyler DeNicola, vp of programmatic revenue and partnerships at A+E Networks.

That is to say, the programmatic TV and streaming ad market did change this year. It may not have been a seismic shift, but it was a notable one that one agency executive summarized succinctly: “Inventory is just more available programmatically.”

AMC Networks’ announcement that three ad spots per hour of programming across AMC, BBC America and We TV is now available for programmatic purchase would seem to be the biggest evidence of this. “If we’re going to make all this inventory programmatic, we have to make linear programmatic as well. And we accomplished that,” said Adlman.

Historically, TV network and streaming service owners had been careful to not open up all their inventory for programmatic purchase. The online ad market had shown how unchecked programmatic access could devalue publishers’ inventory. But just as programmatic guaranteed and private marketplace deals provided greater controls for online publishers, so too have they paved the path for TV networks and streaming services to make programmatic a bigger component of their ad sales efforts.

“We take all of our inventory to market programmatically. Anything that can be streamed is available programmatically through PG or through a biddable private marketplace,” said O’Connor, noting live sports and Nickelodeon as two exceptions. And with Conduit — an ad-tech product that allows SSPs to plug directly into its EyeQ streaming ad platform — Paramount has opened up to more programmatic demand paths while maintaining its control over its inventory.

“What we want to do with our platform is make sure that we have the pipes connected in a way that allows us to, from a business perspective, do the partnerships that we need to connect to the demand that we need and then make sure that we’re not doing the old-school daisy chains and waterfalls and gluing all of these platforms together. We can be smart and run a totally unified auction every time someone’s watching an app and it’s time for an ad break,” said Todd Bender, svp of advertising platforms at Paramount.

One major reason for TV and streaming ad inventory becoming more available programmatically, as mentioned, is the viewership shift from traditional TV to streaming because internet-enabled delivery enables connection with the ad-tech infrastructure. But another factor is the pressure from the buy side for more cross-channel control over their ad buys as well as for more flexible buying options.

“Our agency strategy and the marketplace at large is trying to figure out how can we move some of those previous direct activations to a programmatic activation for better optimization, better audience transaction that ultimately will deliver better results for clients and more efficacy in the media that they’re implementing,” said a second agency executive.

The buy side’s programmatic push — as well as TV networks’ programmatic management — manifested in this year’s upfront negotiations with TV network owners agreeing to a greater extent to allow advertisers’ and agencies’ programmatic spending to count toward their upfront spending commitments.

“Some networks were really leaned into programmatic before and others were more resistant. I do feel like this year we didn’t have as much pushback,” said the first agency executive.

“What we’re seeing is really leaning more into biddable and saying, ‘Okay, we can bring some of the good qualities of biddable — meaning, you can decision on which impressions [and] when you’re going to pulse this budget up and down — but the budget is still firm because it’s committed through the upfront and we keep the spirit of the upfront intact,” said O’Connor.

This article has been updated to reflect that the name of AMC Networks’ flagship TV network is AMC, not AMC Networks.

What we’ve heard

“The average value to a [FAST channel owner] per hour of viewership is 25 cents. So if you watch 40 hours in a month, [the FAST channel owner] makes $10 from that user. If it costs $2 to convert [someone into a FAST channel viewer through ads], then that’s fantastic.”

Streaming executive

Numbers to know

-22%: Percentage decline year over year in TV, streaming and film ad spending between May and October due to the writers’ and actors’ strikes.

36.6%: Percentage share of TV watch time that went to streaming in September 2023.

What we’ve covered

TikTok creators are increasingly tapping into food-centric content — and brands are following:

  • Agency executives have noted an uptick in food influencers.
  • The Influencer Marketing Factory has seen a 30% year-over-year increase in client demand for food content creators.

Read more about TikTok creators here.

What we’re reading

A case study of streaming’s content arms race:

Netflix spent more than $55 million to outbid its rivals and secure the rights to a show that ended up never airing, in a (ridiculous) example of how streaming content costs ballooned, according to The New York Times.

TikTok’s long-form push:

The short-form video platform has been trying to get creators to post videos longer than one minute by dangling ad dollars and, more recently, by telling some creators that half of the videos people watch on TikTok are longer than a minute and longer videos fetch more followers, according to The Information.

Highlighting TV’s low-light problem:

People praise shows like “Game of Thrones” for their cinematic quality, but that aesthetic loses luster in light of the fact that many people’s living rooms lack the pitch-black context of a movie theater to help viewers make out the images, according to Vulture.

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