OnlineVideo.net – It all depends on how you look at it. Programmatic TV ad spending will rise by 75.7 percent this year, growing to $1.13 billion, reports research company eMarketer. It will grow another 85.2 percent in 2018 and 82.1 percent in 2019 when it will be a $3.80 billion market.
That sounds impressive, but programmatic will still be a miniscule part of the overall TV ad market. It will make up 1.6 percent of total U.S. TV ad spending this year, 2.8 percent next, and 5.0 percent in 2019. When the starting amount is small, percentage changes can make something seem bigger than it is.
Earlier this week, OnlineVideo.net shared a MediaRadar Q1 trend report showing that programmatic buying for online video was on the decline likely due to well-publicized brand safety concerns. Television doesn’t have that obstacle, but it does have another: The process isn’t nearly as automated as it is with online inventory.
“The advanced targeting aspect of programmatic TV ad spending is sophisticated,” notes eMarketer forecasting analyst Oscar Orozco. “However, pure automation from beginning to end is still not as advanced as it is for digital programmatic. Currently, ad placement is still generally done manually. For programmatic TV ad spend to grow as fast as we’ve seen on the digital side, it must advance to complete automation.”
eMarketer also looked at addressable TV ad spend and found an almost identical situation: Addressable will experience big year-over-year percentage changes through 2019, but will still be a small part of the overall TV ad spend market. In 2019, addressable TV ad buying in the U.S. will see a 35.3 percent increase to $3.04 billion, making up 4.0 percent of the total market. Currently, three-quarters of U.S. homes with cable or satellite service have a box capable of serving addressable ads.
“Addressable TV is a seller’s market. Even though cable and satellite providers have the capability to target 74 million U.S. households, they are rationing the inventory,” Orozco says. “Some targeted TV ads command lower prices and measurement capability is limited at this point.”
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