Magna Global ventures further into ‘programmatic TV’

Programmatic advertising is slowly but surely coming to the hidebound and wary world of TV, if on TV’s own terms.

The latest example comes from IPG Mediabrands unit Magna Global, which is announcing Feb. 24 that it has formed a consortium with 15 cable networks including Fuse, Ovation and Reelz, across which it will enable automated buying of TV inventory with the application of data for targeting.

The announcement builds on a group Magna formed in 2013 with a smaller number of larger partners including A&E Networks, Clear Channel and Tribune. Magna set an ambitious goal of automating 50 percent of its buying by the end of 2015, and given the dominant role TV plays in its spending, it can’t reach that goal without applying it to TV.

Todd Gordon, evp of Magna Marketplace for Magna Global, said the consortium is about going beyond demographic data by using consumer behavior data (such as purchase history) to pinpoint ads. It will also use technology to serve them and, if possible, apply some kind of performance metric. Despite the fact that real-time bidding isn’t being used, he said, “I kind of think that as long as you can say those three things, you don’t have to be that strict about what we call programmatic.”

These networks are small on an individual basis; seven of the 15 — the Nielsen-measured ones — reach some 160 million unique viewers, while the 5 broadcast networks reach about 270 million, according to Magna. The 15 in the Magna consortium reach specific audience groups such as Hispanics, African-Americans and young people that are hard for advertisers to pinpoint elsewhere, Gordon said.

“Using data to ID audience segments in a linear environment is a big step forward,” he said. “This can bring more value to these audiences that could be overlooked because they’re small.”

Beyond reaching elusive demographic groups, this data-based approach to buying can help an advertiser find potential customers who don’t fit the mold of typical viewers. “For any customer base, there’s a majority that behaves similarly to each other, and there’s a subset that behaves differently,” Gordon said. “They may just be lighter TV viewers who are harder to find. Or they behave differently. So a big push has been to find these places where a unique viewer can be found and reach them efficiently. Beer drinkers who don’t watch sports. There’s plenty of them out there.”

True programmatic doesn’t exist in linear TV today, because it hasn’t had to — the medium is still minting money. Most transactions are still done by humans and revolve around the upfronts and big packages. But as TV watching splinters into longer-tail audiences (like those represented by the Magna consortium), where the viewership numbers become more unstable, the medium will benefit from automation, said Dave Morgan, CEO of Simulmedia, an ad tech company that packages audiences for networks and sells them to brand advertisers that want targeted, measurable campaigns.

Definitions aside, Magna’s move speaks to the continued evolution of programmatic, said programmatic consultant Matt Prohaska. Programmatic may be still dominated by RTB, with its associations of speed and efficiency but also low-quality inventory, fraudulent traffic and cheap CPMs. But it has expanded to include private exchanges and non-RTB transactions, he said. Along the way, linear TV, print and out-of-home media are looking to adopt aspects of programmatic in this broader form.

“This is what programmatic is becoming, and it actually helps the branding of the word so people don’t associate it with the open market,” said Prohaska, of Prohaska Consulting. “We are fortunately getting to a place where buyers and sellers recognize the benefits of programmatic around efficiency around the speed of the transaction and audience targeting, and not necessarily cheaper CPMs.”

Still, while it’s understandable that an agency would adopt the term “programmatic” because it connotes modern efficiency, Morgan believes it’s time the term got some fine-tuning.

“We would all be better served if we would separate out what type of emerging TV is automated TV, what part is addressable and what part is audience-based,” he said.

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