Inside ITV’s plan to sell programmatic ads in streaming programming next year

Being able to sell ads in online auctions frees ITV to go after those advertisers that have enjoyed the targeting of online video but are concerned over the safety of their brands in those environments. Some advertisers were so concerned earlier this year that they started using the budget they would have spent on online video to buy addressable ads in streaming programming. With Planet V, ITV wants to compete with a wider array of media owners.

“Planet V is a significant step forward for us, meeting the widening demands of advertisers and bringing ITV’s unparalleled combination of mass simultaneous reach and targeted advertising,” said Kelly Williams, managing director for commercial at ITV. Updates to the platform will come in the months after its launch, providing what Williams said would be the “very best frictionless, data-driven buy in a premium, brand-safe environment for our clients.”

The promise of addressable TV — bringing targeted advertising to classical broadcast TV — has been bandied about for a while. Commercial broadcasters like ITV have resisted building out their own addressable TV businesses until now because to do so risks putting their content into online auctions where the premium they charge can be chipped away by an algorithm that values an eyeball like any other. But the risks of those online auctions no longer outweigh their potential. People spend more time watching VOD content, which is fueling a market that will be worth €825 million ($705 million) by 2020 across the U.K., Germany, Italy, France and Spain, according to ad tech vendor SpotX.

“This presents an exciting and much-needed opportunity for increased transparency and efficiency across linear and VoD advertising,” said Jamie Clilverd, video and display director for media agency The Specialist Works.

Whether ITV is able to eat into online video budgets could come down to economics. Addressable TV is expensive. A cost-per-thousand impression is around £35 ($45) on ITV, said one media buyer on the condition of anonymity. In comparison, it costs between £10 ($13) and £15 ($19) to run ads on TV, depending on the audience the advertiser wants to reach. For advertisers to buy those impressions, they need to be able to justify that the higher price and limited levels of exposure on a mass-reach channel like TV offset the cost of using data to target households and individuals.

“We had a client that was looking at addressable TV solution where they were paying £3 ($3.85) a CPM to hit a broad audience, which inflated up to £13 ($16.70) when you put one or two audience segments into that buy. And it didn’t justify that outlay when you’re an advertiser that works on short-term metrics. It doesn’t justify the multiplication of a base CPM,” said Henry Daglish, founder of The7stars media agency startup Bountiful Cow.