In this new series, we interview the people and companies paving the way in programmatic TV advertising.
This week, we interview Sandro Catanzaro, the Co-Founder and Senior Vice President of Analytics and Innovation at DataXu. With his deep data science and marketing experience, Sandro has helped DataXu become one of the leading integrated programmatic marketing solutions in the industry. DataXu currently has more than 13 offices across nine countries, servicing more than 700 brands across the globe.
What is your programmatic TV strategy?
The trend towards fully digital media and enabling technologies that started in the 90s will continue. It is fueled by the demand from advertisers to better understand their customers, deliver a more engaging customer experience, and instantly measure results and ROI. Programmatic TV extends advanced targeting to the TV world, allowing advertisers to reach a highly select audience – anywhere they are – rather than limiting commercials to specific shows. Looking five to ten years into the future, it is easy to believe that TV will be fully digital and that advertising decisions will be made at a much more granular level.
The DataXu Marketing Cloud leverages big data analytics to enable marketers to decide which ad message to show to which consumer. The platform is neutral to the type of channel used to reach the consumer, relying on a similar implementation, from mobile ads to computer display ads to programmatic TV ads. This allows marketers to use a single user interface across all channels, liberating them from menial tasks and empowering them to invest more time into strategic framing of opportunities.
Programmatic is an umbrella term that involves the most advanced targeting capabilities from addressable TV (ads seen in cable TV, where one household sees a different ads than their neighbor), to connected TV (similar concept as addressable TV but relying on ads seen through devices like Xbox, Roku), to “TV quilting” where a plan is composed from many smaller spot/scatter buys, modeled to present best eCPM. All of these are valid methodologies to help marketers drive their goals. Over time, we will see more of the market using advanced targeting capabilities such as the first two.
What are the greatest opportunities and challenges related to programmatic TV?
Programmatic TV has just started. The most advanced media companies understand that a deep understanding of customers and their behavior leads to better targeting, greater reach, and ultimately translates in cost efficiencies and higher ROI. This is a situation where everybody wins; with marketers paying less for each consumer reached, media sellers earning more revenue per impression, and consumers receiving a lower volume of advertising, but focused on products and services that are most likely of interest to them.
Programmatic in general (and in TV in particular), allows marketers to create tailored audiences and derive analytics, such as measurement of optimal marketing investment level by product. With more certain proof of investment effectiveness, there are always associated incremental investments; this applies to the marketing investments as it does to financial investments.
Finally, by shortening the distance between the strategic decision-maker and the execution of the media, it is possible to shorten the time between concept, test, results, and iteration.
Programmatic TV’s main challenge relies in a better understanding of the possibilities, from all members of the ecosystem. Most importantly, a recognition that programmatic TV is not about paying less for the same impression, but paying more for the right impressions. Also, because it relies on new targeting capabilities, programmatic TV requires software to be developed and installed in different points of the media delivery supply chain. This follows an adoption curve that will take some time to completely develop.
How much of TV advertising do you believe will go “programmatic” over the next few years?
Although programmatic TV has just started, adoption is already underway and we believe that TV will be mostly programmatic in four years. All technology adoptions begin slowly then hit a transition point of sudden acceleration. This will happen when some of the largest advertisers and larger media suppliers see the large benefits being enjoyed by innovative early adopters. We believe this accelerating point of transition will happen during 2015.
What are the greatest benefits that advertisers will gain from programmatic TV?
Marketers will increase their investment effectiveness by reaching those consumers they care most about. They will also be able to tailor their messages to the audience receiving them. Additionally, they will be able to more accurately map marketing investment and derived benefit and with greater certainty, higher investment volumes are likely. Lastly, with a faster iteration between campaign concept, execution and measurement, we see more direct application of marketing strategy and more daring execution of creative strategy.
With public companies like Mondelez (Oreo, Chips Ahoy, etc.) discussing their favor and investments in programmatic, how should media buyers be thinking about programmatic TV advertising?
CPG/FMCG companies – especially those already using programmatic for other media channels – should focus on learning the possibilities that programmatic TV brings to the market. This is the time to meet with software providers working with programmatic TV and have conversations, tests, and analysis of the results. A great application for a Mondelez, for example, would be to pinpoint and target a health oriented audience with Trident. And for Stride, to present a stylish audience – instead of being restricted to age and gender combinations as used to be the case.
They should also work with media sellers (networks, show producers, cable operators, satellite operators) to learn about their forays into programmatic TV, what type of technology they have today, and what their roadmap looks like.
What else do you think is important to share?
If you look at the marketing world today and compare it with the world from five years ago, it is easy to see how much digital targeting has progressed. Five years from now, programmatic TV will present a significantly different ecosystem. Early adopters will reap the benefits from learning before their competitors how to best apply these technologies and maximize their ROI and business value.